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UNIVERSITY 

OF  CALIFORNIA 

LOS  ANGELES 


SCHOOL  OF  LAW 
LIBRARY 


A  TREATISE  ON 


NEGOTIABLE 
INSTRUMENTS 


FOE 

COLORADO,    CONNECTICUT,    DISTRICT   OP  COLUMBIA,    FLORIDA.   IDAHO,    IOWA. 
KENTUCKY,  LOUISIANA,  MASSACHUSETTS,  MISSOURI,  MONTANA.  NEVADA. 
NEW  HAMPSHIRE,   NEW  JERSEY.    NEW  MEXICO.   NORTH  CAROLINA. 
NORTH    DAKOTA,     OREGON,     PENNSYLVANIA,      TENNESSEE. 
UTAH,     VIRGINIA,     WASHINGTON,      WEST   VIRGINIA. 
WYOMING,  ARIZONA,  ILLINOIS,    KANSAS.  MARY- 
LAND, MICHIGAN,  NEBRASKA,  NEW  YORK, 
OHIO,  OKLAHOMA,   RHODE  ISLAND, 
WISCONSIN. 


By  ARTHUR  W.  SELOVER,  B.  A.,  LL.  M. 

SECOND  EDITION 
By  WILLIAM  H.  OPPENHEIMER. 


CHICAGO 

CALLAGHAN  AND  COMPANY 

1913 


Copyright,  1900, 

BY 

KEEFE-DAVIDSON  LAV/  BOOK  CO. 


Copyright,  1902, 

BY 

KEEFE-DAVIDSON  CO. 


Copyright,  1910, 

BY 

THE  KEEFE-DAVIDSON  CO. 


PREFACE. 


The  Uniform  Negotiable  Instrument  Law  is  now  in  force  in 
thirty-seven  states  and  territories  and  in  the  District  of  Columbia, 
and  has  become  such  an  important  part  of  our  commercial  law 
as  to  warrant  the  publication  of  a  general  work  on  the  subject. 
That  this  book  might  be  of  the  most  practical  value  to  lawyers 
and  others  having  occasion  to  refer  to  the  Law,  it  has  been  deemed 
advisable  to  treat  the  subject  analytically  and  to  change  con- 
siderably the  arrangement  as  found  in  the  Law  and  in  the  previous 
edition  of  this  book.  Also,  there  has  been  added  in  black  letter 
type  at  the  beginning  of  the  treatment  of  each  section  the  pro- 
vision of  the  act  in  question  or  as  much  of  it  as  is  treated  in  that 
particular  part  of  the  work.  This  arrangement,  coupled  with  the 
various  tables  and  copy  of  the  original  draft  of  the  Law  found  in 
the  Appendix,  it  is  hoped  will  prove  not  only  convenient  but 
of  great  practical  benefit. 

The  Law  has  been  before  the  courts  in  numerous  cases  and 
many  important  decisions  have  been  rendered,  and  it  is  regretted 
that  these  have  not  been  altogether  uniform  in  their  construction 
of  the  various  provisions.  Careful  and  systematic  search  has 
been  made  for  all  cases  and  it  is  believed  that  the  present  work 
contains  all  the  published  cases  decided  under  the  act  up  to 
March,  1910. 

While  primarily  it  has  been  sought  to  treat  the  Uniform  Nego- 
tiable Instrument  Law  and  its  interpretation  and  construction, 
still  there  has  been  incorporated  in  the  book  the  important  omitted 
general  rules  of  the  Law  Merchant  which  are  still  in  force,  and 
reference  has  repeatedly  been  made  to  the  Law  Merchant  as  au 


lY  PREFACE. 

aid  to  interpretation    so  as  to  show  clearly  the  change  made  by 
the  Law. 

It  is  hoped  that  this  combination  of  the  Law  and  the  rules  of 
the  Law  Merchant,  as  well  as  the  combination  of  annotated  act 
and  textbook  style  of  treatment,  will  afford  a  practical  textbook 
on  the  subject  of  negotiable  instruments  in  those  states  which 
have  adopted  the  Uniform  Negotiable  Instrument  Law. 
St.  Paul,  Minn.,  August,  26th,  1910. 

WM.  H.  OPPENHEIMER. 


TABLE  OF  CONTENTS. 


CHAPTER  I. 


General  Nature,  Scope,  and  Application  of  the  Negotiable  Instruments 

Laws. 

Page 
§     1.     Nature  and  Purpose  1 

2.  Title  of  Laws  3 

3.  Application  of  Laws  4 

4.  When  Law  Merchant  Governs 7 

5.  Laws  Repealed  8 


CHAPTER  II. 

Definitions  and  Special  Provisions  Relating  to  Bills,  Notes  and  Checks, 

Page 
§     6.     Promissory  Notes  •  •  •  •       1'^ 

7.  Bills  of  Exchange   .■  •       H 

8.  (a)   Inland  Bills   13 

(b)  Foreign  Bills 13 

(c)  Bills  Drawn  in  Sets   14 

9.  Checks    14 

10.     General  Definitions   16 


CHAPTER  III. 

Execution  and  Delivery. 

Page 

11.  Freedom  of  Consent    17 

12.  Necessity  of  Writing    18 

13.  Place  and  Time  of  Execution 19 

14.  Presumption  of  Date   19 

15.  Insertion  of  Date   20 

V 


^  TABLE  OF  CONTENTS. 

Page 

§  16.     Date  Given  Presumed  Correct  21 

17.  Exception — Bona  Fide  Holders 22 

18.  Antedating  and  Postdating   23 

19.  Incomplete  Instruments    23 

20.  Completion  Must  be  as  Authorized 26 

21.  Signature — Necessity  and  Position   28 

22.  Form    29 

23.  Signature   by   Agent    30 

24.  Liability  of  Agent   31 

25.  Descriptive  Words    32 

26.  Signature  by  "Procuration"   34 

27.  Delivery — Necessity    34 

28.  Sufficiency  of  Delivery    35 

29.  Presumptions    37 


CHAPTER  IV. 

Essentials  of  Negotiability. 

Page 

30.  In  General   40 

31.  Substantial  Compliance  Sufficient   41 

32.  Matters  Not  Affecting  Negotiability 41 

1.  Absence  of  Date  41 

2.  Seal    42 

3.  Failure  to  Specify  Value   44 

33.  The  Promise  or  Order 45 

34.  There  Must  be  a  Promise  or  Order  to  Pay 45 

35.  The  Promise  or  Order  Must  be  Unconditional 48 

36.  Unconditional  Though  Contains: 

1.  Reference   to  a   Particular   Fund  or  Account  for   Reim- 

bursement       50 

2.  Statement  of  the  Transaction 50 

37.  Instruments  Payable  Out  of  Particular  Fund _.,  50 

38.  Sum  Certain   54 

39.  Sum  Payable  is  a  Sum  Certain  Though  Payable 54 

1.  With  Interest   54 

2.  By  Stated  Instalments    54 

3.  By  Stated  Instalments  with  Default  Provision 54 

4.  With  Exchange  55 

5.  Collection  Costs  and  Attorney's  Fees 55 

40.  Provision  for  Taxes   ^  55 

41.  Must  be  Payable  in  Money 62 

42.  Certainty  as  to  Time  of  Payment ^  64 


TABLE  OF  CONTENTS.  yJI 

Page 

[43.     Instruments  Payable  on  Demand 65 

44.  Overdue  Paper    65 

45.  Fixed  or  Determinable  Future  Time 67 

46.  Instrument  Payable  on  Contingency 67 

47.  Fixed  or  Determinable  Future  Time — Prior  Contingency 67 

48.  Words  of  Negotiability  71 

49.  Supplied  by  Indorsement  _. 71 

50.  Instruments  Payable  to  Order 72 

51.  Instruments  Payable  to  Bearer 76 

52.  Certainty  as  to  Parties 81 

53.  Designation  of  Drawee  83 

54.  Joint   Drawees    i... 84 

55.  Place  of  Payment 84 

56.  No  Place  of  Payment  Specified 85 

57.  Provisions    Not    Affecting    Negotiability 86 

1.  Sale  of  Collateral;   Conditional  Sale  Notes 86 

2.  Confession  of  Judgment    86 

3.  Waiving  Statutory  Rights   86 

4.  Option   to    Require    Something   in    Lieu   of   Payment   of 

Money     86 

58.  Illegal  Provisions   86 


CHAPTER  V. 

Consideration. 


Page 

59.  Presumption  of  Consideration 92 

60.  Sufficiency    of    Consideration 94 

61.  Antecedent  or  Pre-existing  Debt 94 

62.  Lienholders     95 

63.  Want  or  Failure  of  Consideration 99 

64.  Inadequacy  of  Consideration    99 

65.  Accommodation   Paper    101 

66.  Liability  of  Accommodation  Party  to  Holder  for  Value 101 


CHAPTER  VI. 

Construction  and  Operation. 

Page 

§  67.     1.  Ambiguity  as  to  Amount — Words  Control  Figures 106 

2.  Interest  Clause  106 


■^  TABLE  OF  CONTENTS. 

Page 

3.  Undated  Instruments  ; 106 

4.  Conflict  Between  Written  and  Printed  Portions 107 

5.  When  Bill  May  be  Treated  as  Promissory  Note 107 

6.  Capacity  in  Which  One  Signs  Uncertain 107 

7.  Joint  and   Several   Liability 107 

8.  Memoranda  on  Instrum.ent   107 

9.  Several   Instruments    107 

§  68.     Bill  of  Exchange  Not  an  Assignment 113 

69.  Exception — Bill  on   Particular   Fund 114 

70.  Check  Not  an  Assignment 114 


CHAPTER  VII. 

Presentment  of  Bills  of  Exchange  for  Acceptance. 

Page 

§  71.     When  Necessary   117 

72.     When  Excused  119 

12).     Must  be  Within  Reasonable  Time 120 

74.  Reasonable  Hour;  Business  Day 120 

75.  Sunday  or  Holiday  120 

76.  Where  Time  is  Insufificient 120 

n .     Place  of  Presentment    123 

78.  By  Whom  Made    124 

79.  To  Whom  Made — Drawee  or  His  Agent 124 

80.  Bill  Addressed  to  Two  or  More  Drawees  Not  Partners 124 

81.  Drawee  Dead    125 

82.  Bankruptcy  or  Insolvency  of  Drawee 125 

83.  Bills  Drawn  in  Sets 126 

84.  Dishonor  by  Nonacceptance    127 

85.  Rights  of  Holder  on  Nonacceptance 127 

86.  Duties  of  Holder  on  Nonacceptance 127 

87.  Referee  in  Case  of  Need 128 


CHAPTER  VIII. 

Acceptance  of  Bills  of  Exchange. 

Page 

88.  Necessity    130 

89.  Nature  131 

90.  Revocation    131 

91.  Necessity  of  Writing  and  Signature  of  Drawee 132 

92.  Acceptance  on  Bill   132 


tabll:  of  contei^ts.  ix 

Page 

§  93.  Acceptance  on  Separate  Instrument  133 

94.  Implied   Acceptance    135 

95.  Medium  of  Payment 138 

96.  Presumption  of  Consideration    139 

97.  Sufficiency  of  Consideration    139 

98.  Time  of  Acceptance   140 

99.  Insertion  of  Date    141 

100.  Insertion  of  Wrong  Date   141 

101.  Date  Prima  Facie  Correct   141 

102.  General  and  Qualified  Acceptance 142 

103.  Qualified  Acceptance    143 

104.  Right  to  General  Acceptance   145 

105.  Incomplete  and  Overdue  Paper   146 

106.  Bills   Drawn  in   Sets    147 

107.  Acceptance  on  More  Than  One  Part 147 

108.  Certification     143 

109.  Effect  of  Certification   148 

110.  Necessity  of  Writing   149 

111.  Certification  by  Drawer    149 

112.  Certification  by  Holder  149 

113.  Promise  to  Accept   ISO 


CHTPTER  IX. 

Acceptance  of  Bills  of   Exchange  for   Honor. 

Page 

§  114.     When  Permissible   153 

lis.     How    Made 154 

116.  Construction   of    154 

117.  Liability  of  Acceptor  154 

118.  Parties  Liable  to   155 

119.  Maturity  of  Bill  Payable  After  Sight 156 


CHAPTER  X. 

Indorsement  and  Transfer. 

Page 

§  120.     "Negotiability"   and   "Assignability"    Distinguished 158 

121.     Effect  of  Distinction  on  Rights  of  Parties 158 

1.  Notice  to  Debtor    150 

2.  Equities  and  Defenses  Available 159 


X  TABLE  OF  CONTEJNTS. 

Page 

3.  Suit  in  Name  of  Transferee  160 

4.  Presumption  of  Consideration   161 

§  122.     What  Constitutes  Negotiation   161 

1.  Bearer  Paper   161 

2.  Order  Paper 161 

123.  Transfer,  Without  Indorsement,  of  Order  Paper  .' 161 

124.  Negotiation  by  Delivery   163 

125.  Negotiation  by  Indorsement — Requisites   165 

1.  Where  Written    165 

2.  Consideration    165 

3.  Delivery    165 

4.  Must  Be  of  Entire  Instrument 165 

126.  Wording   of   Indorsement    165 

127.  Name  or  Designation  of  Payee  or  Indorsee  Erroneous 163 

128.  Kinds   of   Indorsement    169 

129.  Special   Indorsements    169 

130.  Blank  Indorsement  Made  Special   169 

131.  Blank  Indorsement    171 

132.  Restrictive  Indorsements    172 

133.  Rights  of  Restrictive  Indorsee   174 

134.  Rights  of  Subsequent  Indorsees  174 

135.  Qualified  Indorsements   175 

136.  Conditional  Indorsements   177 

137.  Indorsements— By  Whom  Made   178 

138.  Corporation  or  Infant   178 

139.  Joint  Payees    179 

140.  By  Agent   180 

141.  Indorsement  in  Representative  Capacity    180 

142.  By  Fiscal  Officer  181 

143.  Date  of  Indorsement   183 

144.  Presumption    183 

145.  Place  of  Indorsement    183 

146.  Negotiation  of  Bills  Drawn  in  Sets 184 

147.  Striking  Out  Indorsements   185 

148.  Termination  of  Negotiability    18') 

149.  Reissuance  and  Renegotiation  186 


CHAPTER  XI. 

Liabilities  and  Rights  of  Parties. 

Page 

§  150.     In  General  188 

151.    Of  Maker  , 189 


(TABLE  OP  CONTENTS.  xl 

Page 

t  152.     Of  Drawer 190 

153.  Of  Acceptor    191 

154.  Of  Indorser — Who   Deemed  an   Indorser 195 

155.  Indorser  of  Paper  Negotiable  by  Delivery 197 

156.  Irregular  Indorsers  198 

157.  Bills  in  Sets  201 

158.  Warranties — Negotiation  by  Delivery  or  Qualified  Indorse- 

ment     201 

159.  Persons  in  Whose  Favor  Warranty  Exists 201 

160.  Public  or   Corporate  Securities 202 

161.  Warranties — Indorser  Without  Qualification    203 

162.  Contract  of  General  Indorser 203 

163.  Consecutive  and  Joint  Indorsers 207 

164.  Special   Indorsers    209 

165.  Indorsement  by  Broker  or  Agent 209 

166.  Rights   of   Holder    210 

167.  Bona  Fide  Holders   211 

168.  Presumptions  and  Burden  of  Proof 228 

169.  Defenses  Available  Against  Bona  Fide  Holders 232 

170.  Incomplete  Instruments 235 

171.  Presumption  of  Delivery   235 

172.  Bona  Fide  Holder  May  Enforce  Payment  to  Full  Amount  238 

173.  Holder  Not  in  Due  Course 240 

174.  Same — Deriving  Title  From  Holder  in  Due  Course 240 


CHAPTER  XII. 

Presentment  for  Payment. 

Page 

175.  When  Necessary   243 

176.  Instrument  Payable  at  a  Special  Place 243 

177.  Necessary  to  Charge  Drawers  and  Indorsers 243 

178.  By  Whom  Made   246 

179.  To  Whom  Made  247 

180.  Party  Primarily  Liable  Dead 247 

181.  Several  Persons  Primarily  Liable 247 

182.  Time  for  Presentment  249 

183.  Instruments  Payable  at  Bank 249 

184.  Day  of  Maturity  Sunday  or  Holiday 249 

185.  Day  of  Maturity  Saturday 249 

186.  Days  of  Grace   253 

187.  Determining  Date  of  Maturity  254 

188.  Instruments  Payable  and  Not  Payable  on  Demand 254 


xu 


TABLE  OF  CONTENTS. 


Pa?re 

189.  Checks    254 

190.  Excusable  Delay   259 

191.  Presentment  to  Acceptor  For  Honor 254 

192.  Place  for  Presentment    261 

193.  Manner  of  Presentment   263 

194.  Dispensing  With  and  Waiver  of  Presentment 264 

195.  Waiver  of  Protest  Includes 264 

196.  Dishonor  For  Nonpayment 266 

197.  Rig-hts  of  Parties  on  Dishonor 267 

198.  Referees  in  Case  of  Need 267 


CHAPTER  XIII. 

Protest   of   Bills   of   Exchange. 

Page 

199.  Necessity    26R 

200.  Dishonor  of  Bill  by  Acceptor  For  Honor  268 

201.  Protest  of  Bill  for  Nonacceptance  and  Nonpayment 268 

202.  Nature  and  Sufficiency  of  Protest  270 

203.  By  Whom  Made    27"^ 

204.  Time  of  Making  Protest— Extending  Notes    273 

205.  Protest  Before  Maturity  Where  Acceptor  is  Insolvent 273 

206.  Protest  of  Bill  Accepted  For  Honor  273 

207.  Place  of  Protest  275 

208.  Protest  of  Lost  or  Detained  Bill  275 

209.  Waiver    276 

210.  Excuses  For  Failure  or  Delay  to  Protest  277 

211.  Damages  Recoverable  in  Case  of  Protest 278 


CHAPTER  XIV. 

Notice  of  Dishonor. 

Page 

212.  Necessity    281 

213.  When  Need  Not  be  Given  Drawer 282 

214.  When  Need  Not  be  Given  Indorser 284 

215.  By  Whom  Given   .; 285 

216.  May  be  Given  by  Agent  285 

217.  Notice  Where  Instrument  is  in  Agent's  Hands  285 

218.  Parties  Protected — Notice  Given  by  or  on  Behalf  of  Holder.  287 

219.  Same — Notice  Given  by  or  on  Behalf  of  Party  Entitled  to 
Give   Notice    k-'j)  287 


TABLi:  OF  COA'TENTS.  xiii 

Page 

§  220.  To  Whom  Given  288 

221.  When  Parties  Are  Dead   288 

222.  When  Parties  Are  Partners   288 

223.  Joint  Parties  Not  Partners    288 

224.  Notice  to  Bankrupt  or  Insolvent  288 

225.  Form  and  Requisites   291 

226.  Sufficiency  of  Terms  and  Effect  of  Misdescription   292 

227.  How  Given    293 

228.  By    Mail    294 

229.  Time  Within  Which  Notice  Must  Be  Given  296 

230.  Parties  Residing  in  the  Same  Place   296 

231.  Parties  Residing  in  Different  Places  297 

232.  Notice  to  Antecedent  Party  298 

233.  Notice  to  Principal  by  Agent   299 

234.  Place  Where  Notice  Must  be  Sent 299 

235.  Actual  Receipt  Sufficient    300 

236.  Dispensing  With  Notice   302 

237.  Instruments  Dishonored  by  Nonacceptance    302 

238.  Waiver  of  Notice    303 

239.  Waiver  of   Protest    303 

240.  Parties  Affected  by  Waiver    303 

241.  Excusable  Delay    305 

242.  Effect  of  Omission  to  Give  Notice  306 


CHAPTER  XV. 

Forgery  and  Alteration. 

Page 

§  243.     Forged  or  Unauthorized  Signature  307 

244.  Effect  of  Alteration   310 

245.  Bona   Fide   Holders    312 

246.  What  Alterations  Are   Material    314 

247.  Same    315 

248.  Presumptions  and  Burden  of  Proof 317 


CHAPTER  XVI. 

Payment  and  Discharge. 

Page 
249.     Hovvr  Instrument  is  Discharged   319 

1.  Payment  to  Holder    319 

2.  Cancellation     320 


xiv  TABLE  OF  CONTENTS. 

Page 

3.  Other  Acts  Discharging  Simple  Contracts  for  the  Pay- 

ment of  Money   320 

4.  Principal  Debtor  Becoming  Holder  320 

§  250.     Instruments  Payable  at  Bank  325 

251.  What  Constitutes  Payment   326 

252.  Instruments  Drawn  in  Sets   328 

253.  Payment  of  Bills  of  Exchange  for  Honor — Who  ]\Iay  Make  329 

254.  Same — Attestation     329 

255.  Same — Declaration  Before  Payment  for  Honor 329 

256.  Same — Preference  of  Parties  Offering  to  Paj"-  for  Honor   ..  330 

257.  Same — Effect  of  Payment  on  Subsequent  Parties   330 

258.  Same — Refusal  of  Holder  to  Receive  Payment  for  Honor  ..  330 

259.  Same— Rights  of  Payor  for  Honor  330 

260.  Discharge  of  Parties  Secondarily  Liable  332 

261.  Who  is  Primarily  Liable   336 

262.  Renunciation     336 

263.  Effect  of  Payment  by  Parties  Secondarily  Liable   338 

264.  Presumptions    339 

265.  Renewal  of  Liability   , 34J 


(QL    ^ /fOJL    -     4r^   'y^'^/7     '^^^'   ' ^  ^^ 


NEGOTIABLE  INSTRUMENTS  LAW 


CHAPTER  I. 


GENERAL  NATURE,  SCOPE,  AND  APPLICATION  OF  THE 
NEGOTIABLE  INSTRUMENTS   LAWS. 

§  \.     Nature  and  Purpose. 

§  2.     Title  of  Laws. 

§  3.     Application  of  Laws. 

When  Laws  Take  Eflfecit. 
§  4.     When  Law  Merchant  Governs. 
§  5.     Laws  Repealed. 

Nature  and  Purpose. 

§  1.     The  Negotiable  Instruments  Law  is  primarily  a  codifica- 
tion of  the  rules  of  the  law  merchant. 

The  national  conference  of  commissioners  on  uniform  state 
laws,  a  body  composed  of  commissioners  from  twenty-nine 
states  and  two  territories,  submitted  to  the  various  legislatures 
and  to  congress  a  draft  for  a  uniform  law  governing  negotiable 
instruments.  This  draft,  which  is  in  substance  a  codification 
of  the  principles  of  the  common  law  governing  negotiable  in- 
struments,!    has     been    adopted,    with    some    modifications,    in 

1  Union  Stock  Yards  Nat.  Bank  v.  Bolan,  14  Idaho,  87,  93  Pac.  508,  125 
Am.  St.  Rep.  146;  Parsons  v.  Utica  Cement  Co.  (Conn.)  73  Atl.  785; 
Mackintosh  v.  Gibbs  (N.  J.  Law)  74  Atl.  708. 

Opp. — Sel. — 1 


2  GENERAL  NATURE  AND  SCOPE.  §  1 

thirty-seven  states  and  in  the  District  of  Columbia.^  It  is  such 
a  matter  of  common  knowledge  as  to  make  it  proper  for  the 
courts  to  take  judicial  notice  of  the  fact  that  the  act  was  en- 
acted because  of  an  effort  on  the  part  of  the  bar  of  many,  if 
not  all,  of  the  states  of  the  union  to  bring  about  a  uniform  sys- 
tem of  law  respecting  negotiable  instruments.^  While  as  be- 
fore stated,  it  was  the  evident  purpose  and  intent  of  the 
framers  of  the  statute  to  incorporate  into  it  the  provisions  of 
the  common  law,^  still  there  follows  the  usual  embarrassment 
which  all  codifiers  encounter  in  framing  a  statute  to  meet  all 
possible  cases.^  The  statute  was,  however,  enacted  for  the 
purpose  of  furnishing,  in  itself,  a  certain  guide  for  the  determina- 
tion of  all  questions  covered  thereby  relating  to  commercial 
paper,^  and,  therefore,  so  far  as  it  speaks  w-ithout  ambiguity  as  | 
to  any  such  question,  reference  to  case  law  as  it  existed  prior  to  , 
its  enactment  is  unnecessary  and  apt  to  be  misleading."^  It  is  ; 
not  merely  a  codification  of  existing  rules,  but  makes  some  quite 
material^  changes,^  and  hence  the  language  of  the  act  is  not  to 
be  ignored  because  in  some  respects  a  change  in  the  law  is 
effected.^°  If,  however,  a  provision  is  doubful  or  has  a  technical 
meaning,  resort  may  be  had  to  the  previous  law.^^  The  character 
of  the  act  as  a  complete  codification  of  the  law,  justifies,  at  times, 

2  For  list  of  states  in  which  the  negotiable  instruments  laws  have  been 
adopted,  see  Appendix  C. 

SRockfield  V.  First  Nat.  Bank,  11  Ohio  St.  311,  83  N.  E.  392,  14  L.  R.  A. 
(N.  S.)  842;  Chemical  Nat.  Bank  v.  Kellogg,  183  N.  Y.  92,  75  N.  E.  1103, 
111  Am.  St.    Rep.  717,  2  L.  R.  A.  (N.  S.)  299. 

4  Gilpin  V.  Savage,  60  Misc.  60S,  112  N.  Y.  Supp.  802;  Union  Stock  Yards 
Nat.  Bank  v.  Bolan,  14  Idaho,  87,  93  Pac.  508,  125  Am.  St.  Rep.  146; 
Mayers  v.  McRimmon,  140  N.  C.  640,  53  S.  E.  447,  111  Am.  St.  Rep.  879. 

5  Gilpin  V.  Savage,  60  Misc.  605,  112  N.  Y.  Supp.  802. 

6  The  act  was  intended  to  provide  a  complete  and  comprehensive  law 
on  the  subject.  Cellers  v.  Meachem,  49  Or.  186,  89  Pac.  426;  First  Nat. 
Bank  v.  Miller,  139  Wis.  126,  120  N.  W.  820. 

7, 8  Columbian  Banking  Co.  v.  Bowen,  134  Wis.  218,  114  N  W.  451; 
Bank  of  England  v.  Vagliano  Bros.  [1891]  App.  Cas.  107,  145. 

9  Columbian  Banking  Co.  v.  Bowen,  134  Wis.  218,  114  N.  W.  451. 

10  Vander  Ploeg  v.  Van  Zuuk,  135  Iowa,  350,  112  N.  W.  807,  124  Am.  St 
Rep.  275. 

11  Bank  of  England  v.  Vagliano  Bros.    [1891]  App.  Cas.    107,  145. 


§  2  TITLE  OF  LAWS.  3 

the  application  of  the  maxim  "Expressio  unius  est  exchisio  al- 
terius."^-  In  construing  provisions  of  the  American  act  co])ied 
from  the  English  Bills  of  Exchange  Act,  it  has  been  said  that, 
where  previous  decisions  in  the  two  countries  are  at  variance,  "it 
would  seem  not  unreasonable  to  suppose  that  it  was  the  intention 
of  the  framers  of  the  American  act"  to  have  it  "construed  accord- 
ing to  the  law  of  this  country  rather  than  of  England.  "^^ 

Title  of  Laws. 

§  2.    The  act  only  deals  with  "negotiable"  instruments. 

The  general  title  of  the  act  is  "A  general  act  relating  to  Ne- 
gotiable Instruments  (being  an  act  to  establish  a  law  uniform 
with  the  laws  of  other  states  on  that  subject)."  This  title  has  been 
held  sufficient  under  a  constitutional  provision  providing  that  no 
law  shall  embrace  more  than  one  subject  to  be  expressed  in  the 
title.i* 

The  negotiable  instruments  laws,  as  passed  in  the  various  states, 
have  almost  uniformly  adopted  the  short  title  "Negotiable  Instru- 
ments Law."^^ 

This  title,  when  taken  with  the  provisions  that  the  words  "bill" 
"note,"  and  "instrument"  shall  mean,  respectively,  bill  of  ex- 
change, negotiable  promissory  note,  and  negotiable  instrument,^^ 
excludes    non-negotiable    instruments.^''    Such    instruments    are 

12  Cellers  v.  Meachem,  49  Or.  186,  89  Pac.  426. 

isjefifrey  v.  Rosenfeld,  179  Mass.    506,  61  N.  E.  49. 

"Gilley  v.  Harrell,  118  Tenn.  115,  101  S.  W.  424. 

15  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La.,  Mo., 
Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Or.,  Pa.,  Tenn.,  Utah,  Va.,  W. 
Va.,  Wyo.   (§190);  111.   (§189);  Kan.   (§1);  Md.    (§13);  Mich.   (§1);  N.  Y. 
(§1);   Old.    (art.   1);   R.  L    (§1);  Wis.    (§1675).     Arizona,  Massachusetts, 
Nebraska,  Ohio  and  Washington  are  the  exceptions. 

16,  17  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  J.,  N.  M.,  N.  C,  N.D.,  Or.,  Pa.,  Tenn.,  Utah, 
Va.,  Wash.,  W.  Va.,  Wyo.  (§191);  Ariz.  (§3487);  III.  (§190);  Kan.  (§2;; 
Md.  (§14);  Mich.  (§2);  Neb.  (§189);  N.  H.  (§190);  N.  Y.  (§2);  Ohio 
(§3178);  Okl.    (art.   1);  R.  L    (§2);   Wis.    (§675).     Harvey  v.   Dimon,  36 


4  GENERAL  NATURE  AND  SCOPE.  §  3 

still  governed  by  the  rules  of  the  common  law,  or  by  the  statutes 
specially  applicable  to  them. 

It  will  thus  be  seen  that,  as  soon  as  non-negotiability  is  estab- 
lished by  applying  the  tests  laid  down  in  the  sections  prescribing 
the  proper  form  of  negotiable  instruments,  that  fact  will  preclude 
the  application  of  any  of  the  other  sections  of  the  negotiable  in- 
struments laws  to  the  instrument  in  question.^^ 

Application  op  Laws. 

§  3.    The  negotiable  instruments  laws  have  no  retroactive  eflfect. 

The  negotiable  instruments  laws  do  not  apply  to  instruments 
made  and  delivered  prior  to  their  passage,^^  though  this  is  not 
necessarily  true  as  to  indorsements  made  on  such  instruments 
after  the  enactment  of  the  statute.^^^  Had  this  provision  been 
omitted,  the  courts  doubtless  would  have  construed  the  laws 
to  be  inapplicable  to  instruments  delivered  before  their  passage, 
under  the  general  rule  that  a  statute  will  not  be  given  a  retro- 
active effect.^'' 

To  determine  what  constitutes  a  delivery  prior  to  the  passage 
of  one  of  these  laws,  we  must  look  to  the  definition  of  "delivery" 
given  in  such  laws.  It  is  there  defined  as  a  "transfer  of  posses- 
sion,   actual    or   constructive,    from    one    person    to    another,  "^i 

Pa.  Super.  Ct.  82;  Westberg  v.  Chicago  Lumber  &  Coal  Co.,  117  Wis.  589, 
94  N.  W.  572. 

18  But  see  Allison  v.  Hollembeak,  138  Iowa,  479,  114  N.  W.  1059. 

19  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Or.,  Pa.,  Tenn.,  Utah, 
Va.,  Wash.,  W.  Va.,  Wyo.  (§195);  Ariz.  (— ) ;  111.  (§194);  Kan.  (§6); 
Md.  (§18);  Mich.  (§2);  Neb.  (§194);  N.  H.  (§194);  N.  Y.  (§6);  Ohio 
(§3178);  Okl.  (art.  1);  R.  L  (§6);  Wis.  (§1675).  Barden  v.  Hornthal 
(N.  C.)  65  S.  E.  513;  Dorsey  v.  Wellman  (Neb.)  122  N.  W.  989. 

19a  Mackintosh  v.  Gibbs  (N.  J.  Law)  74  Atl.  708. 

20  Parkinson  v.  Brandenburgh,  35  Minn.  294,  28  N.  W.  919,  59  Am.  Rep. 
326;  Fife  v.  Oshkosh,  89  Wis.  540,  62  N.  W.  541. 

21  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont,  Nev.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Or.,  Pa.,  Tenn.,  Utah, 
Va.,  Wash.,  W.  Va.,  Wyo  (§191);  Ariz.  (§3487);  111.  (§190);  Kan.  (§2); 
Md.  (§14);  Mich.  (§2);  Neb.  (§189);  N.  Y.  (§2);  N.  H.  (§190);  Ohio 
(§3178);  Okl.  (art.  1);  R.  I.  (§2);  Wis.  (§1675). 


§3  WHEN  LAWS  TAKE  EFFECT.  5 

Possession  then  by  the  payee,  before  the  passage  of  one  of  these 
laws,  would  be  prima  facie  evidence  of  delivery  before  that 
time.22  The  effect  of  this  provision  has  been  considered  by  the 
courts  in  New  York,  where  it  has  been  held  that  the  subsequent 
provision  that  notes  payable  to  the  order  of  the  maker  must  be 
indorsed  by  him^^  does  not  apply  to  a  note  negotiated  before  the 
passage  of  the  law,^*  and  that  questions  of  demand  and  notice 
relating  to  an  instrument  protested  before  the  passage  of  the  law 
are  not  governed  thereby.^^  There  is  some  conflict  as  to  whether 
the  law  applies  to  a  renewal  note  given  after  the  taking  effect  of 
the  act,  the  original  note  having  been  given  before  that  time.-" 
But  by  holding  the  act  to  apply  to  such  notes,  it  is  not  thereby 
rendered  unconstitutional  as  impairing  the  obligation  of  a  con- 
tract.27 

When  laws  take  effect. 

The  time  for  the  negotiable  instruments  laws  to  take  effect  is, 
of  course,  different  in  the  different  states.^^  In  some  of  the  states 
the  law  takes  effect  from  and  after  its  passage,  and  in  others  it 

22  Mahon's  Adm'r  v.  Sawyer,  18  Ind.  73;  Newcombe  v.  Fox,  1  App. 
Div.  389,  37  N.  Y.  Supp.  294;  Kidder  v.  Horrobin,  72  N.  Y.  159;  Wood- 
ford V.  Dorwin,  3  Vt.  82,  21  Am.  Dec.  573;  Mitchell  v.  Conlej.  8  Eng. 
(Ark.)  414. 

For  a  discussion  of  the  question  of  delivery,  see  post,  §§27-29 

23  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La.,  Mass., 
Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Or.,  Okl.,  Pa.,  Tenn., 
Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§184)  Ariz.  (§3487);  111.  (§183);  Kan. 
(§191);  Md.  (§203);  Mich.  (§186);  Neb.  (§183);  N.  Y.  (§320);  Ohio 
(§3177  v);  R.  I.  (§192);  Wi.s.  (§1684). 

21  Odell  V.  Clyde,  23  Misc.  734,  53  N.  Y.  Supp.  61. 

25  University  Press  v.  Williams,  28  Misc.  52,  59  X.  Y.  Supp.  817.  See, 
also,  McMoran  v.  Lange,  25  App.  Div.  11,  48  N.  Y.  Supp.  1000. 

26  That  it  does.  Walker  v.  Dunham,  135  Mo.  App.  396,  115  S.  W.  1086; 
Far  Rockaway  Bank  v.  Norton,  186  N.  Y.  485,  79  N.  E.  709. 

That  it  does  not.  People's  Nat.  Bank  v.  Schepflin,  73  N.  J.  I^tw,  29, 
62  Atl.  333. 

27  Old  debt  extinguished  by  renewal  note.  Walker  v.  Dunham,  135 
Mo.  App.  396,  115  S.  W.  1086. 

28  See  Appendix  C. 


6  GENERAL  NATURE  AND  SCOPE.  §  3 

takes  effect  on  a  specified  day  after,  or  on  the  expiration  of  a 
specified  period  after,  passage.^^  "Where  the  law  takes  effect  at 
a  date  different  from  the  date  of  its  passage,  the  question  whi'her 
instruments  executed  and  delivered  between  the  time  of  the  pass- 
age of  the  law  and  the  time  it  took  effect  are  governed  thereby 
is  important.  In  a  case  where  a  certain  provision  of  a  statute 
was  to  take  effect  in  "April  next,"  the  court  said  that  a  statute 
must  be  "understood  as  beginning  to  speak  at  the  moment  it 
became  a  law,  and  not  before.  It  must  have  the  same  construction 
as  if  passed  on  the  day  when  it  took  effect  ;"^°  and  Cooley,  J., 
in  a  case  involving  a  statute  which,  under  the  constitution  of 
Michigan,  took  effect  ninety  days  from  the  end  of  the  session  at 
which  it  was  passed,  the  legislature  not  having  otherwise  directed, 
said:  "When  the  legislature,  for  reasons  satisfactory  to  them,  de- 
cide to  postpone  the  period  for  the  statute  to  come  into  operation, 
to  a  later  period,  it  is  to  be  presumed,  nothing  appearing  to  the 
contrary,  that  in  the  particular  case  it  was  deemed  important  that 
more  time  be  allowed  for  citizens  to  ascertain  the  proposed 
changes,  and  to  become  acquainted  with  their  bearings.  The  time 
thus  allowed  is  the  reasonable  time  fixed  by  the  legislature  to 
bring  knowledge  of  the  law  home  to  the  parties  interested,  be- 
fore they  are  required  to  govern  their  actions  by  it."  This  case 
held  that  such  a  statute,  between  the  time  of  its  passage  and  the 
time  it  was  to  take  effect,  was  not  even  notice  to  persons  to  be 
affected  by  it.^^  Under  these  decisions,  and  the  general  rule  that 
an  instrument  is  governed  by  the  law  in  force  at  the  time  it  was 
executed,  it  is  clear  that  negotiable  instruments  executed  and 
delivered  between  the  passage  of  one  of  the  negotiable  instru- 

29  See  post,  Appendix  B. 

30  Rice  V.  Ruddiman,  10  Mich.  125.  See,  also,  Charless  v.  Lamberson, 
1  Iowa,  435,  63  Am.  Dec.  457,  where  a  statute  for  the  protection  of  home- 
steads, which  made  them  liable  for  all  debts  contracted  prior  to  its 
passage,  was  held  to  mean  "prior  to  its  taking  effect,"  although  that 
period  was  some  time  after  its  enactment. 

31  Price  V.  Hopkin,  13  Mich.  318.  See,  also,  People  v.  Johnston,  6  Cal, 
674;  Bond  v.  Dolby,  17  Neb.  491,  23  N.  W.  351. 


§4  WHEN  LAW  MERCHANT  GOVERNS.  7 

ments  laws  and  the  time  fixed  for  it  to  take  effect  are  not  gov- 
erned thereby.^2 

When  Law  IMerchant  Governs. 

S  4,     The  law  merchant  governs  in  cases  not  provided  for.  (^  C,  £J  0  ^ 

lu  cases  not  provided  for  in  the  negotiable  instruments  laws,^ 
the  rules  of  the  law  merchant  govern.^^  Obviously,  any  prior' 
statute  repealed  by  any  one  of  the  negotiable  instruments  laws 
is  not  included  in  the  term  "law  merchant,"  as  here  used.  The 
term,  then,  must  be  given  its  primal  meaning,  which  is  a  code  or 
system  of  rules  arising  out  of  the  usages  and  customs  of  trade. 

The  exigencies  of  trade  required  something  more  elastic  thank 
a  purely  cash  basis  for  business  transactions.  A  credit  basis  which  \ 
treated  the  evidence  of  indebtedness  as  an  ordinary  contract,  and 
allowed  a  transferee  no  greater  rights  than  his  transferor, — in 
other  words,  saddled  upon  him  all  equities  and  defenses  to  which 
the  contract  was  subject  between  the  original  parties, — would  not 
tend  to  increase  trade  to  any  great  extent;  so  a  more  extended 
credit  system  arose  by  custom  among  merchants,  which  allowed 
certain  evidences  of  indebtedness  to  be  transferred  free  from  all 
prior  equities,  to  persons  who  took  in  due  course  of  business,  with- 
out notice,  and  in  good  faith.  Bills  of  exchange  were  always 
within  the  custom  of  merchants,  and  all  dispute  as  to  the  status 
of  promissory  notes  was  settled  by  the  statute  (3  &  4  Anne,  c.  9, 
§  1),  which  placed  them  on  the  same  basis  as  bills  of  exchange.^* 

32  Duerson's  Adm'r  v.  Alsop,  27  Grat.  (Va.)  229;  Barlow  v.  Gregory, 
31  Conn.  261;  Cook  v.  Mutual  Ins.  Co.,  53  Ala.  37. 

33  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La.,  Mass., 
Mo.,  Mont.,  Nev.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Or.,  Pa.,  Tenn.,  Utah,  Va., 
Wash.,  W.  Va.,  Wyo.  (§196);  Ariz.  (§3491);  111.  (§195);  Kan.  (§7);  Md. 
(§19);  Mich.  (§2);  Neb.  (§194);  N.  Y.  (§7);  N.  H.  (§195);  Ohio  (§3178  e); 
Okl.  (art.  1);  R..I.  (§7);  Wis.  (§1675). 

3*  This  statute  provided,  inter  alia,  that  "all  notes  in  writing  whereby 
any  person  shall  promise  to  pay  to  any  other  person,  his  order,  or  unto 
bearer,  any  sum  of  money  mentioned  in  the  note,  *  *  *  shall  be 
assignable  or  indorsable  over  in  the  same  manner  as  inland  bills  of  ex- 
change are  according  to  the  custom  of  merchants;  *  *  *  and  that  any 
person  to  whom  such  note  is  indorsed  or  assigned,  or  the  money  therein 


8  GENERAL   NATURE   AND   SCOPE.  §5 

The  rules  of  the  law  merchant  and  the  decisions  of  the  English 
courts  affecting  them,  together  with  the  English  statutes  affirm- 
ing or  modifying  these  rules  and  decisions,  formed  part  of  the 
system  of  law  which  the  American  colonies  adopted  after  the 
Revolution,  and  are  now  generally  considered  as  a  part  of  the 
common  law.^^ 

In  cases  governed  by  the  laws  of  sister  states,  the  court  will 
not  presume  the  negotiable  instruments  law  in  force  in  such  state 
but  will  presume  it  to  be  the  same  as  the  common  law  of  the 
forum  previous  to  the  enactment  of  the  statute.^^ 

Laws  Repealed. 

§  5.    All  prior  inconsistent  laws  are  repealed. 

In  some  of  the  states  the  negotiable  instruments  law  has  ex- 
pressly repealed  a  schedule  of  prior  statutes  relating  to  nego- 
tiable instruments,  and  in  others  it  has  repealed  generally  all  in- 
consistent acts.^^  Where  no  express  repeal  is  stated,  prior  incon- 
sistent and  repugnant  acts  are  repealed  by  implication.^s     As 

mentioned  ordered  to  be  paid  by  indorsement  thereon,  may  maintain  his 
action  for  such  sum  of  money  either  against  the  person  who  assigned 
the  note,  or  against  any  of  the  persons  who  indorsed  the  same,  in  like 
manner  as  in  cases  of  inland  bills  of  exchange."  It  was  repealed  by  the 
Bills  of  Exchange  Act  1882  (45  &  46  Vict.  c.  61).  The  provisions  of  the 
statute  of  Anne  are,  however,  reaffirmed  in  the  Bills  of  Exchange  Act, 
§89,  of  which  provides  that,  with  the  exceptions  therein  noted,  the  pro- 
visions of  such  Bills  of  Exchange  Act  touching  bills  of  exchange  shall 
apply  also  to  promissory  notes. 

35  Cook  v.  Renick,  19  111.  598;  Piatt  v.  Eads,  1  Blackf.  (Ind.)  80;  Board 
ComVs  Bartholomew  Co.  v.  Bright,  18  Ind.  93.  The  law  merchant  is 
presumed  to  be  in  force  in  the  state  until  the  contrary  is  shown.  Hudson 
v.  Matthews,  1  Morris  (Iowa)  94. 

36  Demelman  v.  Brazier,  193  Mass.  588,  79  N.  E.  842.  Common  law  pre- 
sumed to  exist.  Bank  of  Laddonia  v.  Bright-Coy  Commission  Co.  (Mo. 
App.)   120  S.  W.  648. 

37  See  table  of  repealed  acts  in  Appendix. 

38  People  v.  Palmer,  52  N.  Y.  83;  Wood  v.  Oakley,  11  Paige  (N.  Y.) 
403;  Grant  County  v.  Sels,  5  Or.  243;  Greeley  v.  City  of  Jacksonville,  17 
Fla.  174;  Wirt  v.  Stubblefield,  17  App.  D.  C.  283. 


§5 


LAWS   REPEALED. 


the  negotiable  instruments  laws  purport  to  revise  and  codify  the 
rules  and  statutes  relating  to  negotiable  instruments,  they  repeal 
also  all  prior  statutes  on  the  subject,  even  though  such  statutes 
are  not  inconsistent  with  the  provisions  of  the  negotiable  instru- 
ments laws.^^  The  reason  for  this  rule  is  that  there  is  a  reason- 
able inference  that  the  legislature  cannot  be  supposed  to  have  in- 
tended that  there  should  be  two  distinct  enactments,  embracing 
the  same  subject-matter,  in  force  at  the  same  time.***  The  ques- 
tion is  one  of  legislative  intent,  and,  if  the  new  legislation  was 
intended  as  a  substitute  for  the  old,  the  old  is  repealed  by  impli- 
cation^i  This  rule  is  of  general  application,  though  the  pro- 
visions of  the  prior  statutes  have  not  been  embodied  in  the  codi- 
lication>2 


m. 


39  Commonwealth  v.  Kelliher,  95  Mass.   (12  Allen)   480;   Cahall  v.  Citi 
zens'  Mut.  Bldg.  Ass'n,  61  Ala.  232;  Bartlet  v.  King,  12  Mass.  536,  7  Am 
Dec.  99;  Wirt  v.   Stubblefield,   17  App.   D.   C.  283;   Tilley  v.   Hanell,   118 
Tenn.  115,  101  S.  W.  424. 

40  Commonwealth  v.  Kelliher,  94  Mass.   (12  Allen)   480. 

*1  State  V.  Harris,  10  Iowa,  441;  County  Com'rs  of  Prince  George's  Co. 
V.  Commissioners  of  Laurel,  51  Md.  457;  Barker  v.  Bell,  46  Ala.  216. 

<2  Rutland  v.  Mendon,  18  Mass.  (1  Pick.)  154;  Pingree  v.  Snell,  42  Me. 
53. 


CHAPTEH  II. 

DEFINITIONS  AND  SPECIAL  PROVISIONS  RELATING  TO  BILLS, 
NOTES  AND  CHECKS. 

§  6.  Promissory  Notes. 
§  7.  Bills  of  Exchange. 
§     8.     (a)   Inland  Bills. 

(b)  Foreign  Bills. 

(c)  Bills  Drawn  in  Sets. 
§     9.     Checks. 

§  10.     General  Definitions. 

Promissory  Notes. 

§  6.  A  negotiable  promissory  note  is  an  unconditional  promise 
in  writing  made  by  one  person  to  another,  signed  by  the 
maker,  engaging  to  pay  on  demand,  or  at  a  fixed  or  de- 
terminable future  time,  a  sum  certain  in  money  to  order 
or  to  bearer. 

A  "negotiable  promissory  note,"  as  defined  by  the  negotiable 
instruments  laws,  is  "an  unconditional  promise  made  by  one  per- 
son to  another,  signed  by  the  maker,  engaging  to  pay  on  demand, 
or  at  a  fixed  or  determinable  future  time,  a  sum  certain  in  money, 
to  order  or  to  bearer."  ^  This  definition  embodies  the  elements 
of  a  negotiable  instrument,  as  set  forth  in  other  sections.^ 

1  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La.,  Mass., 


2  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  Okl.,  Or.,  Pa.,  Tenn., 
Utah.'va.,  Wash.,  W.  Va.,  Wyo.  (§132);  Ariz.  (§3435);  111.  (§131);  Kan. 
(§139);  Md.  (§151);  Mich.  (§134);  Neb.  (§131);  N.  Y.  (§200);  Ohio 
(§3175-w);   Okl.   (119);   R.  I.   (§140);  Wis.    (§1680-f).     See,  also,  chapter 

IV. 

When  bill  may  be  treated  as  promissory  note,  see  post,  §67. 

10 


§  8  BILLS  OF  EXCHANGE.  11 

Bills  of  Exchange. 

§  7.  A  bill  of  exchange  is  an  unconditional  order  in  writing  ad- 
dressed by  one  person  to  another,  signed  by  the  person 
giving  it,  requiring  the  addressee  to  pay  on  demand,  or  at 
a  fixed  or  determinable  future  time,  a  sum  certain  in 
money  to  order  or  to  bearer. 

§  8.    A  bill  of  exchange  may  be  either 

(a)  An  inland  bill,  or 

(b)  A  foreign  bill,  and 

(c)  May  be  drawn  in  sets. 

The  generally  accepted  form  of  a  bill  of  exchange  is  embodied 
in  the  definition  given  in  the  negotiable  instruments  laws,  viz.: 
"A  bill  of  exchange  is  an  unconditional  order  in  writing,  ad- 
dressed by  one  person  to  another,  signed  by  the  person  giving  it, 
requiring  the  person  to  whom  it  is  addressed  to  pay  on  demand, 
or  at  a  fixed  or  determinable  future  time,  a  sum  certain  in  money 
to  order  or  to  bearer.  "^  This  definition  is  amply  sustained  by 

Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or.,  Pa.,  Tenn., 
Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§184);  Ariz.  (§3487);  111.  (§183);  Kan. 
(§191);  Md.  (§203);  Mich.  (§186);  Neb.  (§183);  N.  Y.  (§320);  Ohio 
(§3177  v);  R.  I.  (§192);  Wis.  (§1684). 

Edelman  v.  Rams,  58  Misc.  561,  109  N.  Y.  Supp.  816.  Instrument  within 
definition  is  negotiable  though  it  contains  the  word  "negotiable."  Alex- 
ander &  Co.  V.  Hazelrigg,  123  Ky.  677,  97  S.  W.  353.  When  bill  may  be 
treated  as  promissory  note,  see  post,  §67. 

Judge  Story's  definition,  "A  promissory  note  is  a  written  engagement 
by  one  person  to  pay  another  person  therein  named,  absolutely  and  un- 
conditionally, a  certain  sum  of  money  at  a  time  specified  therein,"  is 
quoted  with  approval  in  Cayuga  County  Nat.  Bank  v.  Purdy,  56  Mich.  6, 
22  N.  W.  93,  and  Walker  v.  Thompson,  108  Mich.  686,  66  N.  W.  584. 
See,  also,  cases  cited  in  last  mentioned  case. 

3  Neg.  Insit.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La.,  Mass., 
Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or.,  Pa..  Tenn., 
Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§126);  Ariz.  (§3429);  111.  (§125);  Kan.  (§ 


12  DEFINITIONS  AND  SPECIAL  PROVISIONS.  §  8 

the  authorities,*  and  its  different  substantive  elements,  considered 
as  essentials  to  negotiability,  are  discussed  in  a  later  chapter  of 
this  work.^  The  terms  "bill  of  exchange"  and  "draft"  are  in- 
terchangeable, but  the  latter  term  is  used  more  generally  to 
designate  inland  than  foreign  bills.^ 

Same — Several  drawees. 

A  bill  of  exchange  "may  be  addressed  to  two  or  more  drawees 
jointly,  whether  they  are  partners  or  not ;  but  not  to  two  or  more 
drawees  in  the  alternative  or  in  succession."'''  This  provision  of 
the  negotiable  instruments  laws  seems  to  render  a  bill  addresed 
to  two  or  more  drawees  in  the  alternative  or  in  succession  not 
only  non-negotiable  but  invalid.  By  another  provision,  instru- 
ments payable  to  the  order  of  "one  or  some  of  several  payees" 
are  payable  to  order,  and  are  negotiable.^    How  the  courts  will 

133);  Md.  (§145);  Mich.  (§128);  Neb.  (§125);  N.  Y.  (§210);  Ohio  (§3175  q); 
R.  I.  (§134);  Wis.  (§1680). 

Cashier's  check  is  a  bill  of  exchange  payable  on  demand.  Singer  Mfg. 
Co.  V.  Summers,  143  N.  C.  102,  55  S.  E.  522.  Accepted  sight  draft,  for 
the  price  of  goods,  with  bill  of  lading  attached,  indorsed  and  negotiated 
by  the  payee,  is  governed  by  commercial  law.  Bank  of  Guntersville  v. 
Jones  Cotton  Co.  (Ala.)  46  So.  971. 

The  word  "or"  before  "determinable"  was  omitted  in  the  law  as  first 
adopted  in  New  York,  but  the  omission  was  supplied  by  amendment. 
Laws  1898,  c.  336,  §25. 

4  Kendall  v.  Galvin,  15  Me.  131,  32  Am.  Dec.  141;  Biesenthall  v 
Williams,  62  Ky.  (1  Duv.)  329,  85  Am.  Dec.  629;  Luff  v.  Pope,  5  Hill 
(N.  Y.)  414;  Newman  v.  Frost,  52  N.  Y.  422;  Henderson  v.  Pope,  39  Ga. 
361;  Rice  v.  Ragland,  29  Tenn.  (10  Humph.)  545,  S3  Am.  Dec.  111. 

5  See  chapter  IV. 

6  Cole  V.  Dalton,  6  Daly  (N.  Y.)  484. 

7  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La.,  Mass., 
Mo.,  Mont,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or.,  Pa.,  Tenn., 
Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§128);  Ariz.  (§3431);  111.  (§127);  Kan. 
(§135);  Md.  (§147);  Mich.  (§130);  Neb.  (§127);  N.  Y.  (§212);  Ohio 
(§3175  s;);  R.  I.  (§136);  Wis.  (§1680  b). 

The  words  "or  in  succession"  are  not  in  the  Wisconsin  Negotiable 
Instruments   Law. 

8  See,  also,  post,  §50,  subd.  6,  and  notes. 


§  8  INLAND  AND  FOREIGN  BILLS.  13 

harmonize   these   apparently  inconsistent  provisions   remains   to 
be  seen. 

Same — Inland  and  foreign  bills. 

An  inland  bill  is  one  which  is,  or  on  its  face  purports  to  be, 
both  drawn  and  payable  within  the  same  state,  and  any  other 
is  a  foreign  bill.^  Thus,  a  bill  drawn  by  one  resident  of  a  state 
upon  another  resident  of  the  same  state  is  an  inland  bill,^°  and 
so  is  one  drawn  in  one  city  of  a  state  and  payable  in  another  city 
of  the  same  state.^^  But  a  bill  drawn  in  one  state  by  a  resident 
thereof,  on  a  resident  of  another  state,  or  country,  and  payable 
in  the  latter  state,  is  a  foreign  bill.^- 

It  will  thus  be  seen  that,  in  determining  whether  a  bill  is  in- 
land or  foreign,  the  various  states  of  the  Union  are  considered  as 
foreign  to  each  other. 

Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  F!a.,  Idaho,  Iowa,  Ky.,  La.,  Mass., 
Mo.,  Mont,  Nev.,  N.  H.,  N.  J.,  N  M.,  N.  C,  N.  D.,  Old.,  Or.,  Pa.,  Tenn., 
Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§8);  Ariz.  (§3311);  111.  (§8);  Kan. 
(§15);  Md.  (§27);  Mich.  (§10);  Neb.  (§8);  N.  Y.  (§27);  Ohio  (§3171  a); 
R.  I.  (§16);  Wis.  (§1675-8). 

9  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La.,  Mass., 
Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Or.,  Pa.,  Tenn.,  Utah, 
Va.,  Wash.,  W.  Va.,  Wyo.  (§129);  Ariz.  (§3432);  111.  (§128);  Kan.  (§136); 
Md.  (§  148);  Mich.  (§  131);  Neb.  (§  128);  N.  Y.  (§  213);  Ohio  (§  3175  t); 
R.  I.  (§137);  Wis.   (§1680-e). 

Bank  of  Laddonia  v.  Bright-Coy  Commission  Co.  (Mo.  App.)  120  S.  W. 
648. 

Damages  allowable  on  protested  foreign  bill,  see  post,  §211. 

10  Kaskaskia  Bridge  Co.  v.  Shannon,  6  111.  (1  Gilm.)  15. 
"Young  V.  Bennett,  70  Ky.   (7  Bush)  474. 

12  Knickerbocker  Life  Ins.  Co.  v.  Pendleton,  112  U.  S.  696,  28  Law.  Ed. 
866;  Buckner  v.  Finley,  27  U.  S.  (2  Pet.)  586,  7  Law.  Ed.  528;  Joseph  v. 
Salomon,  19  Fla.  623;  Ticonic  Bank  v.  Stackpole,  41  Me.  302;  Commercial 
Bank  of  Kentucky  v.  Varnum,  49  N.  Y.  269;  Phoenix  Bank  v.  Hussey, 
29  Mass.  (12  Pick.)  483;  Ocean  Nat.  Bank  v.  Williams,  102  Mass.  141; 
Aborn  v.  Bosworth,  1  R.  I.  401;  Gardner  v.  Bank  of  Tennessee,  31  Tenn. 
(1  Swan)  420;  Brown  v.  Ferguson,  4  Leigh  (Va.)  37,  39,  24  Am.  Dec.  707; 
Amsinck  v.  Rogers,  189  N.  Y.  252,  82  N.  E.  134,  121  Am.  St.  Rep.  858. 


14  DEFINITIONS  AND  SPECIAL  PROVISIONS.  §9 

Same — Bills  in  sets. 

It  is  customary  to  draw  a  foreign  bill  of  exchange  in  a  set  of 
two  or  three,  usually  three.  One  of  the  set  recites  that  it  is  the 
"first  of  exchange,"  and  orders  payment  to  be  made  if  the  "sec- 
ond and  third  (are)  unpaid,"  another  that  it  is  the  "second  of 
exchange,  first  and  third  unpaid,"  and  the  third  that  it  is  the 
"third  of  exchange,  first  and  second  unpaid,"  ^^  If  each  part 
is  thus  numbered,  and  refers  to  the  other  parts,  all  the  parts 
constitute  one  bilL^* 

Checks. 

§  9,    A  check  is  a  bill  of  exchange  drawn  on  a  bank  and  payable 
on  demand. 

The  main  distinguishing  features  of  a  check  are  that  it  is 
drawn  on  a  bank  and  is  payable  on  demand.^^    A  check  payable 

13  Where  eight  blank  acceptances,  four  of  which  were  designated  "First 
of  exchange  (second  unpaid),"  and  four  "second  of  exchange  (first  un- 
paid)," were  sent  to  a  correspondent,  who  filled  the  blanks,  and  nego- 
tiated them  as  separate  bills,  a  purchaser  of  one  of  the  bills  was  not 
charged  with  notice  that  it  was  one  of  a  set  by  the  presence  of  the  words 
"Second  of  exchange,  first  unpaid,"  and  the  acceptor  was  liable.  Bank 
of  Pittsburg  V.  Neal.  63  U.  S.  (22  How.)  96,  16  Law.  Ed.  323. 

Payment  of  bills  drawn  in  sets,  see  post,  §252. 

14  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La.,  Mass., 
Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Qkl.,  Or.,  Pa.,  Tenn., 
Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§178);  Ariz.  (§3481);  111.  (§177);  Kan. 
(§185);  Md.  (§197);  Mich.  (§180);  Neb.  (§177);  N.  Y.  (  310);  Ohio 
(§3177  o);  R.  I.  (§186);  Wis.  (§1631-35). 

Durkin  v.  Cranston,  7  Johns.  (N.  Y.)  442;  Miller  v.  Hacklej^  5  Johns. 
(N.  Y.)  375,  4  Am.  Dec.  372. 
Making  a  check  in  duplicate,  see  post,  §  9. 

15  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or.,  Pa., 
Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  185)  ;  Ariz.  (§  3487)  ;  III. 
(§  184);  Kan.  (§  192);  Md.  (§  204);  Mich.  (§  181);  Neb.  (§  184);  N.  Y. 
(§  321)  ;  Ohio  (§  3177V)  ;  Okl.  (§  185)  ;  R.  L  (§  193)  ;  Wis.  (§  1684-1). 

Cossel  V.  Regierer,  114  N.  Y.  Supp.  601;  Blake  v.  Hamilton  Dime  Sav. 
Bank  Co.,  79  Ohio  St.  189,  87  N.  E.  73,  20  L.  R.  A.  (N.  S.)  290. 


§  9  CHECKS.  15 

at  a  designated  future  time,  or  at  a  certain  period  after  date,  is 
a  bill  of  exchange.  The  decisions  on  this  point  generally  involve 
the  question  of  right  to  days  of  grace.  Though  such  days  have  been 
abolished  by  most  of  the  negotiable  instruments  laws,^^  it  is 
clear  that  an  instrument  payable  otherwise  than  on  demand  is 
not  properly  a  "check,"  within  the  meaning  of  the  definition  of 
such  instrument  in  these  laws.^^  Checks  are  defined  by  them  as 
bills  of  exchange  drawn  on  a  bank  and  paj'able  on  demand,  and 
the  provisions  relating  to  such  bills  are,  with  certain  exceptions, 
made  applicable  to  checks.^^    A  check  may  be  made  in  duplicate, 

Bill  drawn  on  business  house  is  not  a  check.  Amsinck  v.  Rogers, 
189  N.  Y.  252,  82  N.  E.  134,  121  Am.  St.  Rep.  858. 

Checks  are  negotiable  instruments.  Boswell  v.  Citizens'  Sav.  Bank, 
123  Ky.  485,  29  Ky.  Law  Rep.  988,  96  S.  W.  797;  Morrison  v.  Bailey,  5 
Ohio  St.  13,  64  Am.  Dec.  632. 

It  is  essential  to  a  check  that  it  be  payable  on  demand.  Harrison  v. 
Nicollet  Nat.  Bank,  41  Minn.  488,  43  N.  W.  336,  16  Am.  St.  Rep.  718,  5 
L.  R.  A.  746. 

16  Georgia  Nat.  Bank  v.  Henderson,  46  Ga.  487,  12  Am.  Rep.  590;  Mer- 
chants' Bank  V.  Woodruff,  6  Hill  (N.  Y.)  174;  Hawley  v.  Jette,  10  Or.  31, 
45  Am.  Rep.  129;  Brown  v.  Lusk,  12  Tenn.  (4  Yerg.)  210;  Harrison  v. 
Nicollet  Nat.  Bank,  41  Minn.  488,  43  N.  W.  336,  16  Am.  St.  Rep.  718,  5 
L.  R.  A.  746.  Contra,  see  Way  v.  Towle,  155  Mass.  374,  29  N.  E.  506; 
Andrew  v.  Blachly,  11  Ohio  St.  89;  Westminster  Bank  v.  Wheaton,  4 
R.  I.  30. 

1"  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or.,  Pa., 
Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§85);  Ariz.  (§3388);  Neb.,  111. 
(§85);  Kan.  (§92);  Md.  (§104);  Mich.  (§87);  Neb.  (§85);  N.  Y.  (§145); 
Ohio  (§3174c);  R.  I.  (§93);  Wis.   (§§1678-15). 

18  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  low^a,  Ky.,  La., 
Mass.,  Mo.,  Mont,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or.,  Pa., 
Tenn.,  Utah.,  Va.,  Wash.,  W.  Va.,  Wyo.  (§185);  Ariz.  (§3487);  111.  (§184); 
Kan.  (§192);  Md.  (§204);  Mich.  (§187);  Neb.  (§184);  N.  Y.  (§321);  Ohio 
(§3177-v);  R.  L  (§193);  Wis.  (§1684-1). 

Wedge  Mines  Co.  v.  Denver  Nat.  Bank,  19  Colo.  App.  182,  11  Pac.  873; 
Cassel  v.  Regierer,  114  N.  Y.  Supp.  601.  This  is  declaratory  of  the  law  in 
some  of  the  states.  Laird  v.  State,  61  Md.  309;  Henshaw  v.  Root,  60  Ind. 
220;  Planters'  Bank  v.  Merritt,  54  Tenn.  (7  Heisk.)  177;  Purscll  v.  Alle- 
mong,  22  Grat.  (Va.)  739. 

See,  also,  Rogers  v.  Durant,  140  U.  S.  298,  35  Law.  Ed.  482. 


16  DEFINITIONS  AND  SPECIAL  PROVISIONS.  §  10 

like  a  foreign  bill  of  exchange/^  but  is  not  a  foreign  bill,  though 
drawn  by  a  bank  in  one  state  on  a  bank  in  another  state.^" 

§  10.     General  definitions. 

The  negotiable  instruments  laws  provide  that  in  construing  the 
various  provisions  of  the  act  the  following  words  shall  be  deemed 
to  have  the  defined  meaning,  unless  the  context  of  the  act  other- 
wise requires.^^ 

"Acceptance"  means  an  acceptance  completed  by  delivery  or 
notification, 

"Action"  includes  counterclaim  and  set-off. 

"Bank"  includes  any  person  or  association  of  persons  carry- 
ing on  the  business  of  banking,  whether  incorporated  or  not. 

"Bearer"  means  the  person  in  possession  of  a  bill  or  note  which 
is  payable  to  bearer. 

"Bill"  means  bill  of  exchange,  and  "note"  means  negotiable 
promissory  note. 

"Delivery"  means  transfer  of  possession,  actual  or  construc- 
tive, from  one  person  to  another. 

"Holder"  means  the  payee  or  indorsee  of  a  bill  or  note,  who  is 
in  possession  of  it,  or  the  bearer  thereof. 

"Indorsement"  means  an  indorsement  completed  by  delivery. 

"Instrument"  means  negotiable  instrument. 

"Issue"  means  the  first  delivery  of  the  instrument,  complete  in 
form,  to  a  person  who  takes  it  as  a  holder. 

"Person"  includes  a  body  of  persons,  whether  incorporated  or 
not. 

"Value"  means  valuable  consideration. 

"Written"  includes  printed,  and  "writing"  includes  print. 

19  Merchants'  Nat.  Bank  v.  Ritzniger,  118  111.  484,  8  N.  E.  834. 

20  Merchants'  Nat.  Bank  v.  Ritzniger,  118  111.  484,  8  N.  E.  834. 

21  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Or.,  Pa.,  Tenn.,  Utah, 
Va.,  Wash.,  W,  Va.,  Wyo.  (§191);  Ariz.,  (§3487);  111.  (§190);  Kan.  (§2); 
Md.  (§14);  Mich.  (§2);  Neb.  (§189);  N.  H.  (§190);  N.  Y.  (§2);  Ohio 
(§3178);  Okl.  (art.  1);  R.  I.  (§2);  Wis.  (§1675). 


CHAPTER  m. 


EXECUTION  AND  DELIVERY. 


§  11.  Freedom  of  Consent. 

§  12.  Necessity  of  Writing. 

§  13.  Place  and  Time  of  Execution. 

§  14.  Presumption  of  Date. 

§  15.  Insertion  of  Date. 

§  16.  Date  Given  Presumed  Correct. 

§  17.  Exception. — Bona  Fide  Holders. 

§  18.  Antedating  and  Postdating. 

§  19.  Incomplete  Instruments. 

§  20.  Completion  Must  be  as  Authorized. 

Exception. — Bona  Fide  Holders. 

§  21.  Signature — Necessity  and  Position. 

§  22.  Form. 

§  23.  Signature  by  Agent. 

§  24.  Liability  of  Agent. 

§  25.  Descriptive  Words. 

§  26.  Signature  by  "Procuration." 

§  27.  Delivery — Necessity. 

§  28.  Sufficiency  of  Delivery. 

Conditional  Delivery. 

§  29.  Presumptions. 


Freedom  of  Consent. 

§  11.  Like  other  contracts,  the  execution  of  a  negotiable  instru- 
ment must  be  unattended  by  fraud,  duress,  incapacity,  or 
other  vitiating  elements. 

Every  negotiable  instrument  is  a  contract  and  as  such  its  ex- 

17 

Opp.— Sel.— 2 


18  EXECUTION  AND  DELIVERY.  §  12 

eeution  must  be  unattended  by  fraud,^  duress,^  or  incapacity 
on  the  part  of  the  maker,  drawer,  indorser,  or  other  person  assum- 
ing liabilities  pn  the  instrument.^  The  general  rules  of  contracts 
govern  this  phase  of  a  negotiable  instrument.^ 


Necessity  of  Writing. 

§  12.     The  instrument  must  be  in  writing. 

A  negotiable  instrument  must,  of  course,  be  in  writing.^  While 
it  is  not  safe  to  write  a  bill  or  note  in  pencil  because  of  the  danger 
of  erasures  and  alterations,  one  written  in  pencil  is  valid  and 
negotiable,^  at  least  so  long  as  it  is  legible^  It  is  not  necessary, 
however,  that  the  instrument  be  written  out  in  either  ink  or  pen- 
cil, for  printed  forms  of  bills  and  notes  have  come  into  such  com- 
mon use  that  the  negotiable  instruments  laws  have  recognized  the 
custom  by  providing  that  ''writing"  shall  include  print.^ 

1  One  who  signs  a  note  cannot  set  up  a  defense  that  he  did  not  read 
the  fine  print  on  its  face.  Bank  of  Morgan  City  v.  Herwig,  121  La.  513, 
46  So.  611. 

2Rueping  Leather  Co.  v.  Watke,  135  Wis.  616,  116  N.  W.  174. 

3  Bade  v.  Feay,  63  W.  Va.  166,  61  S.  E.  348. 

*  There  being  no  necessity  for  it,  the  negotiable  instruments  act  makes 
no  general  provision  as  to  fraud,  etc.  General  works  should  be  con- 
sulted. 

5  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or.,  Pa., 
Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§1);  Ariz.  (§3304);  111.  (§1); 
Kan.  (§  8);  Md.  (§  20);  Mich.  (§  3);  Neb.  (§  1);  N.  Y.  (§  20);  Ohio  (§ 
3171);  R.  I.  (§  9);  Wis.  (§  1675-1). 

6  Reed  v.  Roark,  14  Tex.  329,  65  Am.  Dec.  127.  An  indorsement  may 
be  written  in  pencil.  Brown  v.  Butchers'  &  Drovers'  Bank,  6  Hill 
(N.  Y.)  443,  41  Am.  Dec.  755;  Closson  v.  Stearns,  4  Vt.  11,  23  Am.  Dec. 
245. 

7  Reed  v.  Roark,  14  Tex.  329,  65  Am.  Dec.  127. 

8  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  J..  N.  M.,  N.  C,  N.  D.,  Or.,  Pa.,  Tenn.,  Utah, 
Va.,  Wash.,  W.  Va.,  Wyo.  (§191);  Ariz.  (§3487);  111.   (§190);  Kan.  (§2); 


§  14:  PLACE  AND  TIME  OE  EXECUTION.  19 

Place  and  Time  of  Execution. 

§  13.    A  negotiable  instrument  need  not  specify  the  place  where 
it  is  drawn  nor  its  date. 

In  accordance  with  the  common  law  the  negotiable  instruments 
act  provides  that  the  validity  and  negotiable  character  of  an  in- 
strument are  not  affected  by  its  failure  to  specify  the  place  where 
it  is  drawn.^  Neither  at  common  law/"  nor  under  the  negotiable 
instruments  law,^^  is  dating  the  bill  or  note  essential  to  its  valid- 
ity. This  refers  merely  to  the  form  of  the  instrument  and  not  to 
the  materiality  of  the  true  date.^^ 

§  14.    Not  being  dated,  the  instrument  will  be  considered  dated 
as  of  the  time  it  was  issued. 

If  the  instrument  is  not  dated,   it  will  be  considered  to   be 

Md.    (§14);   Mich.   (§2);   Neb.    (§189);   N.   H.    (§190);   N.   Y.    (§2);   Ohio 
(§3178);  Okl.  (art.  1);  R.  I.  (§2);  Wis.  (§1675). 

See,  also,  Farmers'  Bank  of  Kentucky  v.  Ewing,  78  Ky.  2<A,  39  Am. 
Rep.  231;  Zimmerman  v.  Rote,  75  Pa.  188. 

9  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or.,  Pa., 
Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§6);  Ariz.  (§3309);  '11.  (§6); 
Kan.  (§13);  Md.  (§25);  Mich.  (§8);  Neb.  (§6);  N.  Y.  (§25),  Ohio 
(§3171e);  R.  L   (§14);  Wis.   (§1675-6). 

10  Michigan  Ins.  Co.  v.  Estate  of  Leavenworth,  30  Vt.  TI;  Sparran  v. 
Neeley,  91  Pa.  17;  Archer  v.  Claflin,  31  111.  306;  Husbrook  v.  Wilder,  1 
Pin.  (Wis.)  645.  A  defective  date,  consisting  merely  of  the  fiarures 
"1887,"  does  not  invalidate  an  order.  Weld  v.  Eliot  Five  Cent  Sav.  Bank, 
158  Mass.  339,  33  N.  E.  519. 

11  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or.,  Pa., 
T^'jin.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§6);  Ariz.  (§3309);  111.  (§6); 
Kan.  (§13);  Md.  (§25);  Mich.  (§8);  Neb.  (§6);  N.  Y.  (§25);  Ohio  (§3171e); 
R.  I.  (§14);  Wis.  (§1675-6). 

Error  to  dismiss  complaint  on  note  for  failure  to  give  date  of  latter; 
motion  to  make  pleading  more  definite  might  lie.  Church  v.  Stevens,  56 
Misc.   572,  107  N.  Y   Supp.  310. 

12  See  post,  insertion  of  date,  §17;  alteration  of  instruments,  §246. 


20  EXECUTION  AND  DELIVERY.  §  15 

dated  as  of  the  time  when  it  was  issued,^^  that  is,  as  of  the  time 
when  it  is  first  delivered,  complete  in  form,  to  a  person  who  takes 
it  as  a  holder,^* 


Insertion  of  Date. 

§  15.  Being  undated  and  payable  at  a  fixed  period  after  date, 
any  holder  may  insert  the  true  date  and  the  instrument  is 
payable  accordingly. 

Any  holder  of  an  instrument  payable  at  a  fixed  period  after 
date,  but  not  dated,  may  insert  therein  the  true  date  of  its  issu- 
anee.^5  This  section  should  be  construed  in  connection  with  the 
provision  providing  that  an  incomplete  instrument  must  be  filled 
up  strictly  in  accordance  with  the  authority  given  in  order  that 

13  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or.,  Pa., 
Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§17);  Ariz.  (§3320);  111.  (§17); 
Kan.  (§24);  Md.  (§36);  Mich.  (§19);  Neb.  (§17);  N.  Y.  (§36);  Ohio 
(§3171P);  R.  L  (§25);  Wis.  (§1675-17). 

1*  Ncg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Or.,  Pa.,  Tenn., 
Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§191);  Ariz.  (§3487);  111.  (§190); 
Kan.  (§2);  Md.  (§14);  Mich.  (§2);  Neb.  (§189);  N.  H.  (§190);  N.  Y.  (§2); 
Ohio  (§3178);  Okl.  (art.  1);  R.  I.  (§2);  Wis.  (§1765). 

15  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or..  Pa., 
Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§13);  Ariz.  (§3316);  111.  (§13); 
Kan.  (§20);  Md.  (§32);  Mich.  (§15);  Neb.  (§13);  N.  Y.  (§32);  Ohio 
(§3171L);  R.  I.  (§21);  Wis.  (§1675-13). 

The  payee  of  a  note  delivered  with  the  place  for  the  date  left  blank 
has  no  implied  authority  to  antedate  the  instrument.  Goodman  v. 
Simonds,  19  Mo.  106;  Emmons  v.  Meeker,  55  Ind.  321.  Where  the 
month  is  given,  the  holder  may  fill  the  blank  for  the  day  of  the  month 
with  any  date  within  the  month.  Page  v.  Morrell,  3  Keyes  (N.  Y.)  117, 
3  App.  Dec.  433.  For  authority  to  insert  date  on  accommodation  paper, 
see  Androscoggin  Bank  v.  Kimball,  64  Mass.  (10  Cush.)  373;  Mitche'.l  v. 
Culver,  7  Cow.  (N.  Y.)  336.  Authority  to  fill  blanks,  see  post,  §§19,  20, 
Inserting  date  of  acceptance,  see  post,  chapter  VIII,  §§§  99,  100. 


§  17  PRESUMPTIONS  AS  TO  DATE.  21 

it  may  be  enforced  against  any  person  who  became  a  party  to  it 
prior  to  its  completion/^  and,  as  so  construed,  apparently  does  not 
abrogate  the  common-law  rule  that  an  insertion  of  the  wrong  date 
is  a  material  alteration  avoiding  the  instrument  as  between  the 
parties.^^ 

Presumptions. 

§  16.    The  instrument  being  dated,  the  date  given  is  prima  facie 
the  true  date. 

§  17.    Exception. — The  presumption  is  conclusive  as  against  a 
subsequent  holder  in  due  course. 

"Where  the  instrument  is  dated,  the  date  given  is  prima  facie 
the  true  date  of  the  making  or  drawing  of  the  instrument,^^  and 
the  burden  of  proof  to  show  a  mistake  in  the  date  of  a  note  in  suit 
is  on  the  def  endant.^^  As  stated,  this  presumption  is  not  conclusive, 


16  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Monit,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl., 
Or.,  Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§14);  Ariz.  (§3317); 
111.  (§14);  Kan.  (§21);  Md.  (§33);  Mich.  (§16);  Neb.  (§14);  N.  Y.  (§33); 
Ohio    (§3171m);  R.  I.   (§22);  Wis.   (§1675-14). 

i^If  a  date  prior  to  the  delivery  of  the  instrument  is  inserted  in  a 
note  payable  two  years  for  date,  it  avoids  the  note.  English  v.  Benemaii, 
5  Pike  (Ark.)  377.  See,  also,  post,  chapter  XV,  §246,  holding  change  of  date 
a  material  alteration. 

iSNeg.  Inst.  Laws  Colo.,  Conn.,  D.  C.,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or.,  Pa., 
Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§11);  Ariz.  (§3314);  111.  (§11); 
Kan.  (§18);  Md.  (§30);  Mich.  (§13);  Neb.  (§11);  N.  Y.  (§30);  Ohio 
(§3171j);   R.   I.    (§19);  Wis.    (§1675-11). 

See,  also,  Bayley  v.  Taber,  6  Mass.  451;  Cowing  v.  Altman,  71  N.  Y. 
435,  27  Am.  Rep.  70;  Kinsely  v.  Sampson,  100  111.  573. 

i9Towles  V.  Williams,  2  Rich.  Law  (S.C.)  562.  Thus,  where  a  statute 
made  certain  notes  void  if  issued  after  a  certain  day,  nq,tes  dated  before 
that  day  are  presumed  to  have  been  issued  before  that  time,  and  the 
burden  is  on  the  defendant  to  show  otherwise.  Bayley  v.  Taber,  6 
Mass.   451, 


22  EXECUTION  AND  DELIVERY.  §  17 

and  may  be  rebutted  by  parol  or  extrinsic  evidence  showing  that 
the  date  given  is  not  the  true  date,^°  on  the  theory  that  the  date  is 
only  descriptive,^^  but  the  mistake,  to  be  available,  should  be 
pleaded.22 

Exception;  bona  fide  holders. 

Ordinarily,  the  true  date  must  be  inserted,^^  but  the  insertion  of 
a  vi^rong  date  does  not  avoid  the  instrument  in  the  hands  of  a 
subsequent  holder  in  due  course,  but  as  to  him  the  date  so  inserted 
will  be  regarded  as  the  true  date.-*  By  rendering  this  presump- 
tion conclusive  without  qualification,  or,  in  other  words,  by  con- 
clusively presuming  prejudice  in  the  case  of  a  bona  fide  holder, 
the  negotiable  instruments  act  has  apparently  changed  and 
strengthened  the  common-law  rule  allowing  the  mistake  to  be 
corrected,  except  as  to  an  innocent  indorsee  or  purchaser  who 
would  be  prejudiced  by  the  correction.^s 

20  Bank  of  Cumberland  v.  Mayberry,  43  Me.  198.  Parol  evidence  is 
admissible  to  show  a  mistake  in  date  as  between  the  original  parties. 
Biggs  V.  Piper,  86  Tenn.  589,  8  S.  W.  851;  Drake  v.  Rogers,  32  Me.  524; 
Barlow  v.  Buckingham,  68  Iowa,  169,  26  N.  W.  58.  See,  also.  Cowing  v. 
Altman,  71  N.  Y.  435,  27  Am.  Rep.  70.  Parol  evidence  is  admissible  also 
when  the  date  is  ambiguous  or  illegible.  Fenderson  v.  Owen,  54  Me. 
'i12,  92  Am.  Dec.  551.  In  an  action  by  a  bank  on  a  note  in  the  hand- 
writing of  the  bank's  cashier,  it  may  be  shown  that  he  was  not  in  the 
employ  of  the  bank  until  after  the  date  of  the  note.  Hauerwas  v.  Goodloe, 
101  Ala.  162,  13  So.  567.  A  note  dated  "1888"  may  be  shown  to  have 
been  executed  in  1882.     Barlow  v.  Buckingham,  68  Iowa,  169,  26  N.  W.  58. 

21  Dean  v.   DeLezardi,  2   Cushm.    (Miss.)   424. 
22Almich  V.  Downey,  45  Minn.  460,  48  N.  W.  197. 
23  Miles  V.  Major,  25  Ky.  (2  J.  J.  Marsh)   153. 

2*  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C.,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.  Okl,  Or.,  Pa., 
Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§13);  Ariz.  (§3316);  111.  (§13); 
Kan.  (§20);  Md.  (§32);  Mich.  (§15);  Neb.  (§13);  N.  Y.  (§32);  Ohio 
(§3171L);  R.  I.  (§21);  Wis.  (§1675-13). 

25Almich  V.  Downey.  45  Minn.  460,  48  N.  W.  197. 


§1D  INCOMPLETE    INSTRUMENTS.  23 

Antedating  and  Postdating. 

§  18.    Antedating  or  postdating  an  instrument  does  not  affect  its 
validity  unless  done  lor  an  illegal  or  fraudulent  purpose. 

The  instrument  is  not  invalid  for  the  reason  only  that  it  is 
antedated  or  postdated,  provided  this  is  not  for  an  illegal  or 
fraudulent  purpose.^^  An  antedated  or  postdated  instrument  may, 
of  course,  be  negotiated  after  or  before  the  date  given,^^  and  any 
one  to  whom  such  an  instrument  is  delivered  acquires  title  thereto 
as  of  the  date  of  delivery .^^  One  prejudiced  by  the  antedating  or 
postdating  may  show  the  actual  time  of  delivery,  and  the  instru- 
ment will  be  given  effect  from  that  time.^^  An  instrument  ante- 
dated to  evade  the  law  is  invalid^*^  as  to  all  persons  having  notice.^^ 

Incomplete  Instruments. 

§  19.    A  person  in  possession,  after  delivery,  of  an  incomplete 
instrument,  has  prima  facie  authority  to  complete  it: 

(a)  By  filling  up  blanks  therein  if  it  is  wanting  in  any 

material  particular; 

(b)  By  filling  up  a  paper  signed  in  blank  with  the  in- 

tent that  it  should  be  converted  into  a  negotiable 
instrument. 

26  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or.,  Pa., 
Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§12);  Ariz.  (§3315);  111.  (§12); 
Kan.  (§19);  Md.  (§31);  Mich.  (§14);  Neb.  (§12);  N.  Y.  (§31);  Ohio 
(§3171K);  R.  I.  (§20);  Wis.  (§1675-12). 

Brewster  v.  McCardel,  8  Wend.  (N.  Y.)  478;  Gray  v.  Wood,  2  Har.  & 
J.  (Md.)  328;  Ohio  Life  Ins.  &  Trust  Co.  v.  Winn,  4  Md.  Ch.  253; 
Richter  v.  Selin,  8  Serg.  &  R.  (Pa.)  425. 

27  Brewster  v.  McCardle,  8  Wend.  (N.  Y.)  478;  Pasmore  v.  North,  13 
East,  517. 

28  Same  sections  of  negotiable  instruments  laws  as  last  above  cited. 

29  Baldwin  v.  Freydendall,  10  111.  App.  (10  Bradw.)  106. 

30  Williams'  Ex'rs  v.  Williams,  15  N.  J.  Law,  255,  where  an  attempt 
was  made  to  evade  the  usury  laws;  Bayley  v.  Taber,  5  ]\Iass.  286,  4  Am. 
Dsc.  57,  where  a  note  was  antedated  to  avoid  a  statute  prohibiting  the 
issuance  of  such   notes  after  a   certain  date. 

31  Serle  v.  Norton,  9  Mees  &  W.  309. 


24  EXECUTION  AND  DELIVERY.  §  19 

The  implied  authority  to  complete  an  incomplete  instrument  is 
conditional  upon  there  having  been  a  previous,  valid  delivery  of 
the  instrument ;  for  where  an  incomplete  instrument  has  not  been 
delivered  it  will  not,  if  completed  and  negotiated,  without  author- 
ity, be  a  valid  contract  in  the  hands  of  any  holder,  as  against  any 
person   whose   signature   was  placed   thereon   before   delivery.^^ 

Filling  blanks. 

Prima  facie  authority  is  conferred  on  the  person  in  possession 
of  a  negotiable  instrument,  to  fill  up  the  blanks  therein  if  the  in- 
strument is  wanting  in  any  material  particular.^^ 

While  the  authority  is  not  limited  to  the  filling  of  such  blanks 
as  are  necessary  to  complete  the  instrument,^*  still  the  authority 
must  be  exercised  according  to  the  intended  purpose  and  use  of 
the  instrument,^^  and  depends  upon  the  real  authority  which  the 
signer  in  fact  gave  in  the  matter,^^  and  it  follows  that  the  prima 
facie  authority  by  the  act  may  be  met  and  overcome  by  evidence 
of  what  authority  was  in  fact  given.^'?    In  applying  these  rules  it 

32  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or.,  Pa., 
Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§15);  Ariz.  (§3318),  111.  (§15); 
Kan.  (§22);  Md.  (§34);  Mich.  (§17);  Ariz.  (§15);  N.  Y.  (§34);  Ohio 
(§3171n);   R.  I.  a23);  Wis.  (§1675-15). 

Massachusetts  National  Bank  v.  Snow,  187  Mass.  159,  72  N.  E.  959. 

33  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C.,  Fla.,  Idaho,  Iowa  Ky.,  La,, 
Mass.,  Mo.,  Mont,  Nev.,  N.  H.,  N.  J..  N.  M.,  N.  C.  N.  D.,  Okl.,  Or.,  Pa., 
Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§14);  Ariz.  (§3317);  111.  (§14); 
Kan.  (§21);  Md.  (§33);  Mich.  (§16);  Ariz.  (§14);  N.  Y.  (^33);  Ohio 
(§3171m);  R.  I.  (§22);  Wis.  (§1675-14). 

Authority  is  merely  prima  facie.  Boston  Steel  &  Iron  Co.  v.  Steuer, 
183  Mass.  140,  66  N.  E.  646,  97  Am.  St.  Rep.  426. 

34  Johnston  v.  Hoover,  139  Iowa,  143,  117  N.  W.  277. 

"Material"  is  not  synonymous  with  "necessary"  so  as  to  restrict  the 
right  to  fill  in  an  omission  essential  to  the  completion  of  the  instrument, 
but  includes  all  omitted  matter  usually  found  in  such  instruments.     Id. 

35  First  Nat.  Bank  of  Wilkes-Barre  v.  Barnum,  160  Fed.  245.  Does  not 
authorize  erasure  of  written  or  printed  part  and  insertion  of  something 
else,  though  when  signed  instrument  is  a  mere  skeleton  of  a  note.     Id. 

36  Boston  Steel  &  Iron  Co.  v.  Steuer,  183  Mass.  140,  66  N.  E.  64o,  97 
Am.  St.  Rep.  426. 

37  Boston  Steel  &  Iron  Co.  v.  Steuer,  183  Mass.  140,  66  N.  E.  646, 
97  Am.  St.  Rep.  426. 


§  19  FILLING  BLANKS.  25 

has  been  held  that  the  holder  of  a  negotiable  instrument  may  in- 
sert his  own  name  in  a  blank  space  left  for  the  name  of  the  payee,^ 
and  may  fill  a  blank  left  for  the  time,^^  or  the  place*"  of  payment, 
or  for  the  amount  payable.*^ 

Paper  signed  in  blank. 

Where  a  blank  paper  is  signed  and  delivered  by  the  signer 
with  intent  that  it  shall  be  converted  into  a  negotiable  instrument, 
a  holder  has  prima  facie  authority  to  fill  it  up  as  such  for  any 
amount.*^ 

38  Boyd  V.  McCann,  10  Md.  118;  Thompson  v.  Rathbun,  18  Or.  202, 
22  Pac.  837.  So  of  a  note  entirely  blank.  See  Mitchell  v.  Culver,  7 
Cow.  (N.  Y.)  336.  At  common  law,  where  the  maker  of  a  check  did  not 
designate  a  payee,  unless  it  was  issued  by  him,  no  one  else  had  authority 
to  complete  the  instrument  by  writing  in  the  name  of  a  payee.  Reed  v. 
Mattapan  Deposit  &  Trust  Co.,  198  Mass.  306,  84  N.  E.  469. 

39  McGrath  v.  Clark,  56  N.  Y.  34,  15  Am.  Rep.  372;  Johns  v.  Harrison, 
20    Ind.  317. 

40Redlich  v.  Doll,  54  N.  Y.  234,  13  Am.  Rep.  573;  Winter  v.  Pool, 
104  Ala.  580,  16  So.  543. 

4iAs  to  authority  to  add  interest  clause  or  fill  up  blanks  left  for 
interest  clause,  see  Hcopes  v.  Collingwood,  10  Colo.  107,  13  Pac.  909, 
3  Am.  St.  Rep.  565;  First  Nat.  Bank  v.  Carson,  60  Mich.  432,  27  N.  W. 
657;  McGrath  v.  Clark,  56  N.  Y.  34,  15  Am.  Rep.  372;  Farmers'  Nat. 
Bank  v.  Thomas,  79  Hun,  595,  29  N.  Y.  Supp.  837;  Weyerhauser  v. 
Dun,  100  N.  Y.  150,  2  N.  E.  274. 

*2Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or..  Pa., 
Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§14);  Ariz.  (§3317);  Ill.(§14); 
Kan.  (§21);  Md.  (§33);  Mich.  (§16);  Ariz.  (§14);  N.  Y.  (§33);  Ohio 
(§3171m);  R.  I.   (§22);  Wis.    (§1675-14). 

In  the  Wisconsin  negotiable  instruments  law  the  words  "prima  facie" 
are  left  out,  and  the  statute  reads:  "A  signature  on  a  blank  paper  de- 
livered by  the  person  making  the  signature,  in  order  that  the  paper  may 
be  converted  into  a  negotiable  instrument,  operates  'as  an  authority' 
to  fill  it  up  as  such  for  any  amount."  In  the  negotiable  instruments  law 
as  first  adopted  in  New  York,  the  words  "prima  facie"  were  printed 
in  italics,  but  this  was  changed  by  amendments,  doubtless  on  the  theory 
that,  by  the  use  of  italics,  such  words  were  unduly  emphasized.  Laws 
1898,  c.  336,  §  4.  A  check  properly  signed  and  complete  on  its  face  is 
presumed  to  have  been  complete  when  delivered.  Hensel  v.  Chicago, 
St.  P.,  M.  &  O.  R.  Co.,  57  Minn.  88,  47  Am.  St.  Rep.  576. 


26  EXECUTION  AND  DELIVERY.  §  20 

§  20.  In  order,  however,  that  any  such  instrument  when  com- 
pleted may  be  enforced  against  any  person  who  became  a 
party  thereto  prior  to  its  completion,  it  must  be  filled  up 
strictly  in  accordance  with  the  authority  given  and  within 
a  reasonable  time. 

Exception. — As  to  a  holder  in  due  course  to  whom  it  is 
negotiated  after  completion. 

Authority  to  fill  in  blanks  may  be  either  express  or  such  as  the 
law  implies  from  the  possession  of  an  incomplete  instrument,  Tu 
either  case  the  exercise  of  the  authority  must  be  in  strict  accord- 
ance with  the  authority  given*^  and  must  be  exercised  witliin  a 
reasonable  time**  in  order  to  render  it  enforcible  against  one  who 
became  a  party  to  the  paper  before  its  completion.  In  determin- 
ing what  is  a  "reasonable  time"  or  an  "unreasonable  time"  re- 
gard is  to  be  had  to  the  nature  of  the  instrument,  the  usage  of 
trade  or  business,  if  any,  with  respect  to  the  instrument,  and  the 
facts  of  the  particular  case.f^  Implied  authority  to  fill  in  blanks 
goes  no  further  than  authorizing  the  insertion  of  that  which  is 
necessary  to  make  the  obligation  speak  according  to  its  intended 

43  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or.,  Pa., 
Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§14);  Ariz.  (§3317);  111.  (§14); 
Kan.  (§21);  Md.  (§33);  Mich.  (§16);  Neb.  (§14);  N.  Y.  (§33);  Ohio 
(§3l71m);   R.   I.    (§22);   Wis.    (§1675-14). 

Boston  Steel  &  Iron  Co.  v.  Steuer,  183  Mass.  140,  66  N.  E.  646,  97 
Am.  St.  Rep.  426.  Authority  to  fill  a  blank  left  for  the  amount  in  a  draft 
which  is  limited  to  a  fixed  sum  does  not  authorize  the  insertion  of  a 
larger  amount  on  payment  of  an  additional  consideration.  Clower  v. 
Wynn,  59  Ga.  246. 

4*  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or.,  Pa., 
Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§14);  Ariz.  (§3317);  111.  (§14); 
Kan.  (§21);  Md.  (§33);  Mich.  (§16);  Neb.  (§14);  N.  Y.  (§33);  Ohio 
(§3171m);  R.  I.  (§22);  Wis.  (§1675-14). 

45Xeg.  Inst.  Laws  Colo.,  Conn.,  D.  C.,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or.,  Pa., 
Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§193);  Ariz.  (§3489);  111.  (§192); 
Kan.  (§4);  Md.  (§16);  Mich.  (§2);  Neb.  (§191);  N.  Y.  (§4);  Ohio 
(§3178b);  R.  L  (§4);  Wis.  (§1675). 


§  20  FILLING  BLANKS.  27 

purpose  and  use,^^  and  in  no  case  does  it  authorize  a  material 
alteration  in  the  original  terms  of  the  paper.*''  The  authority 
should  be  construed  in  the  light  of  the  purpose  of  the  instru- 
ment*^ and  with  reference  to  other  parts  of  it.*^ 

Holders  in  due  course. 

If,  however,  after  completion,  such  instrument  is  negotiated 
to  a  holder  in  due  course,  it  is  valid  and  effectual  for  all  pur- 
poses in  his  hands,  and  he  may  enforce  it  as  if  it  had  been  filled 
up  strictly  in  accordance  with  the  authority  given  and  within  a 
reasonable  time.^" 

*6  First  Nat.  Bank  of  Wilkes-Barre  v.  Barnum,  160  Fed.  245. 

*7  First  Nat.  Bank  v.  Gridley,  112  App.  Div.  398,  98  N.  Y.  Supp.  445; 
First  Nat.  Bank  of  Wilkes-Barre  v.  Barnum,  160  Fed.  245.  Does  not 
authorize  erasure  of  written  or  printed  part  and  insertion  of  something 
else,  though  when  signed  instrument  is  a  mere  skeleton  of  a  note.  First 
Nat.  Bank  of  Wilkes-Barre  v.  Barnum,  160  Fed.  245.  Where  one  indorsed 
printed  form  of  note  in  which  the  date,  amount,  and  time  of  payment 
were  all  blank,  held  the  maker  was  not  authorized  to  change  place  of 
payment  as  printed  on  form.     Id. 

48  Authority  given  by  a  surety,  on  signing  a  note,  and  delivering  it 
to  the  principal,  to  fill  up  a  blank  left  for  the  amount  with  the  amount 
of  the  debt,  empowers  the  creditor  to  fill  the  blank  with  the  true 
amount  of  the  debt,  regardless  of  the  representations  of  the  principal 
to  the  surety  as  to  the  amount.  Eichelberger  v.  Old  Nat.  Bank,  103 
Ind.  401.  3  N.  E.  127. 

*5>If  there  is  an  indication  on  the  instrument  of  the  am.ount-for  which 
it  is  to  be  made  payable,  as  where  the  intended  amount  is  expressed  in 
figures  on  the  margin,  such  figures  limit  the  amount  to  be  inserted  in  the 
blank  in  the  body  of  the  instrument.  Hall  v.  Bank  of  the  Common- 
wealth. .33  Ky.  (3  Dana)  258. 

5"  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or., 
Pa.,  Tcnn.,  Utah,  Va.,  W^ash.,  W.  Va..  Wyo.  (§  14);  Ariz.  (§  3317);  III. 
(§  14);  Kan.  (§  21);  Md.  (§  33);  Mich.  (§  16);  Neb.  (§  14);  N.  Y.  (§  33); 
Ohio  (§  3171m);  R.  L  (§  22);  Wis.  (§  1675-14). 

Boston  Steel  &  Iron  Co.  v.  Steuer,  183  Mass.  140,  66  N.  E.  646,  97  Am. 
St.  Rep.  426. 

See  post,  chapter  XI,  §    170. 


28  EXECUTION  AND  DELIVERY.  §  21 

Signature  — Necessity  and  Position. 

§  21.  An  instrument  to  be  negotiable  must  be  signed  by  the 
maker  or  drawer,  but  the  position  of  the  signature  is  im- 
material if  it  is  clear  that  it  was  placed  on  the  paper  in 
the  capacity  of  maker  or  drawer. 

A  negotiable  instrument  must  be  signed  by  the  maker  or 
drawer.^i  As  the  act,  however,  merely  requires  that  the  instru- 
ment be  "signed,"  the  position  of  the  signature  is  immaterial,  it 
being  sufficient  if  it  appears  in  any  part  of  the  instrument.^^  How- 
ever, as  a  corollary  to  the  provision  that  where  the  signature  is 
so  placed  upon  the  instrument  that  it  is  not  clear  in  what  capacity 
the  person  making  the  same  intended  to  sign,  he  is  now  deemed 
an  indorser,^^  the  position  of  the  signature  must  be  such  as  to 
clearly  indicate  that  it  was  placed  upon  the  paper  in  the  capacity 
of  maker  or  drawer.^*  "This  provision,  by  its  very  terms,  applies 
only  to  a  case  of  doubt  arising  out  of  the  location  of  the  signature 
upon  the  instrument.  Names  are  sometimes  placed  at  the  side, 
on  the  end,  or  across  the  face  of  the  instrument,  and  thus  a  doubt 
arises  as  to  whether  the  signer  intended  to  be  bound  as  a  maker 
or  an  indorser,  or  perhaps  as  a  guarantor,  and  to  solve  these 
doubts  the  section  in  question  was  evidently  framed.     It  was  to 

51  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont,  Nev.,  N.  H.,  N.  J.,  N.  M.,  \.  C,  N.  D.,  Okl..  Or., 
Pa.,  Tenn.,  Utah,  Va..  Wash.,  W.  Va.,  Wyo.  (§  1);  Ariz.  (§  3304);  111. 
(§  1);  Kan.  (§  8);  MJ.  (§  20);  Mich.  (§  3);  Neb.  (§  1);  N.  Y,  ($  20); 
Ohio  (§  3171);  R.  I.  (§  9);  Wis.  (§  1675-1). 

See,  also,  May  v.  Miller,  27  Ala.  515. 

62  Lincoln  v.   Hinzey,   51    111.   435. 

53  See  post,  chapter  XII,  §154. 

5*  Taylor  v.  Dobbins,  1  Strange,  399;  Quin  v.  Sterne,  26  Ga.  223.  71 
Am.  Dec.  204;  Lincoln  v.  Hinzey,  51  111.  435;  Lampkin  v.  State,  105  Ala. 
1,  16  So.  575.  Applying  this  rule,  an  acommodation  party  signing  note 
on  its  face  before  delivery  has  been  held  a  comaker,  though  word  "surety" 
was  prefixed  t'O  his  name.  Edmonston  v.  Ascough,  43  Colo.  55,  95 
Pac.  313. 


§  22  SIGNATURE.  2§ 

settle  a  doubt  fairly  arising  from  the  ambiguous  location  of  the 
name,  and  applies  to  no  other,  "^^  and  hence  does  not  apply 
where  the  doubt  is  as  to  whether  the  party  intended  to  sign  in  an 
individual  or  in  a  representative  capacity  as  maker,^^  and  this 
holds  true  though  the  paper  is  in  the  hands  of  a  bona  fide  holder." 
The  ambiguity  being  as  to  whether  one,  signing  as  a  maker,  in- 
tended to  do  so  in  a  representative  or  individual  capacity,  the 
doubt  may  be  removed  by  parol  and  extrinsic  evidonce.^^ 


Same — Form. 

§  22.  No  particular  form  is  necessary  and  one  signing  in  a  trade 
or  assumed  name  will  be  liable  to  the  same  extent  as  if 
he  signed  his  own  name. 

It  is  much  the  safer  practice  for  the  maker  or  drawer  to  sign 
his  name  in  full,  but  a  signature  by  means  of  initials,^^  or  by  an 
abbreviation  of  the  name  of  the  maker,^*^  by  the  use  of  figures,*^^  or 
by  a  mark,  is  sufficient,  if  intended  as  a  signature.^^     Q^g  sign- 


55  Germania  Nat.  Bank  v.  Mariner,  129  Wis.  544,  109  N.  W.  574. 

56  Where  a  note  read:  "Four  months  after  date  the  N.  W.  S.  W. 
promise  to  pay,"  and  was  signed  "The  N.  W.  S.  W.,  E.  R.  S.  Treas. 
J.  W.  M.,"  held  J.  W.  M.'s  liability  was  that  of  maker,  the  doubt  being 
as  to  whether  he  acted  as  a  representative  or  as  an  individual,  and  hence 
the  statute  did  not  apply.  Germania  Nat.  Bank  v.  Mariner,  129  Wis.  544, 
109  N.  W.  574. 

57Germania  Nat.  Bank  v.  Mariner,  129  Wis.  544,  109  N.  W.  574. 
58  Germania  Nat.  Bank  v.  Mariner,  129  Wis.  544,  109  N.  W.  574. 
69  Palmer  v.  Stephens,  1  Denio  (N.  Y.)  471. 

60  See  Kemp  v.  McCormick,  1  Mont.  420. 

61  Brown  v.  Butcher's  &  Drovers'  Bank,  6  Hill  (N.  Y.)  433,  41  Am. 
Dec.  755. 

62  Gervais  v.  Baird,  2  Brev.  (S.  C.)  37;  Willoughby  v.  Moulton,  47  N.  H. 
205;  Shank  v.  Butsch,  28  Ind.  19;  Handyside  v.  Cameron,  21  111.  588, 
74  Am.  Dec.  119;  Hilborn  v.  Alford,  22  Gal.  482;  McGowan  v.  Collins 
(Ala.)  46  So.  228;  Jackson  v.  Tribble  (Ala.)  47  So.  319. 


so  EXECUTION  AND  DELIVERY.  §  23 

ing  in  a  trade  or  assumed  name  is  liable  to  the  same  extent  as  if 
he  had  signed  in  his  own  name.^^ 


Signature  by  Agent. 

§  23.  The  signature  of  any  party  may  be  made  by  a  duly  author- 
ized agent.  No  particular  form  of  appointment  is  neces- 
sary for  this  purpose ;  and  the  authority  of  the  agent  may 
be  established  as  in  other  cases  of  agency.  But  to  be 
liable  on  the  instrument  the  principal  should  be  disclosed. 

The  signature  of  any  party  to  a  negotiable  instrument  may  be 
made  by  a  duly  authorized  agent.^*  To  be  binding  upon  the  prin- 
cipal the  execution  of  the  instrument  must  be  within  the  apparent 
scope  of  the  agent's  authority .^^  No  particular  form  of  appoint- 
ment is  necessary,  and  the  authority  of  the  agent  may  be  estab- 
lished as  in  other  cases  of  agency.^® 


63  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or.,  Pa.. 
Tenn,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  18);  Ariz.  (§  3321);  111.  (§  18); 
Kan.  (§  25);  Md.  (§  2,7);  Mich.  (§  20);  Neb.  (§  18);  N.  Y.  (§  Z7);  Ohio 
(§  3171q);  R.  I.  (§  26);  Wis.  (§  1675-18). 

Jewett  V.  Whalen,  11  Wis.  124,  129. 

6*  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or., 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§19);  Ariz.  (§3322);  111. 
(§  19);  Kan.  (§  26);  Md.  (§  38);  Mich.  (§  21);  Neb.  (§  19);  N.  Y.  (§  38); 
Ohio  (§  3171  R);  R.  I.  (§  27);  Wis.  (§  1675-19). 

65  One  taking  a  note  signed  in  partnership  name,  knowing  it  to  have 
been  signed  by  one  of  the  partners  outside  the  scope  of  his  agency  and 
the  partnership  business,  cannot  recover  against  the  partnership  or  non- 
signing  partners.     King  v.  Mecklenburg,  43  Colo.  316,  95  Pac.  951. 

66  Same  sections  negotiable  instruments  laws  last  above  cited.  See 
Conroe  v.  Case,  74  Wis.  85,  41  N.  W.  1064.  As  to  ratification  of  un- 
authorized signature,  see  Bartlett  v.  Tucker,  104  Mass.  336,  6  Am.  Rep. 
240;  Howard  v.  Duncan,  3  Lans.  (N.  Y.)  174;  Paul  v.  Berry,  78  111.  158; 
First  Nat.  Bank  v.  Badger  Lumber  Co.,  54  Mo.  App.  327;  Bell  v.  Waudby, 
4  Wash.  743;  Ballston  Spa  Bank  v.  Marine  Bank,  16  Wis.  120. 


§  24  SIGNATURE    BY    AGENT.  31 

Undisclosed  principal. 

In  accordance  with  the  rule  that  persons  dealing  with  negotiable 
instruments  are  presumed  to  take  them  on  the  credit  of  the 
parties  whose  names  appear  upon  them  and  that  a  person  not  a 
party  cannot  be  charged  upon  proof  that  the  ostensible  party- 
signed  or  indorsed  as  his  agent,^'^  the  negotiable  instruments  act 
has  provided  that  no  person  is  liable  on  an  instrument  whose 
signature  does  not  appear  thereon.^^ 

Liability  op  Agent. 

§  24.  Where  the  instrument  contains  or  a  person  adds  to  his 
signature  words  indicating  that  he  signs  for  or  on  behalf 
of  a  principal,  or  in  a  representative  capacity,  he  is  not 
liable  on  the  instrument  if  he  was  duly  authorized. 

Where  the  instrument  shows  either  in  the  body  thereof,  or  by 
means  of  words  added  after  the  signature,  that  it  was  signed  for 
or  on  behalf  of  a  principal,  or  in  a  representative  capacity,  the 
signer  is  not  personally  liable  if  he  was  duly  authorized.^^  The 
undoubted  effect  of  this  section  is  to  render  one  signing  for  or 
on  behalf  of  a  principal,  or  in  a  representative  capacity,  person- 
ally liable  on  the  instrument  if  he  acts  without  authority,'^*^  and 

67  Briggs  V.  Partridge,  64  N.  Y.  363,  21  Am.  Rep.  617. 

68  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C.,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or., 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  18);  Ariz.  (§  3321);  111. 
(§  18);  Kan.  (§  25);  Md.  (§  37);  Mich.  (§  20);  Neb.  (§  18);  N.  Y.  (§  37); 
Ohio  (§  3l71q);  R.  I.  (§  26);  Wis.  (§  1675-18). 

Brown  v.  Parker,  89  Mass.  (7  Allen)  337;  Bolles  v.  Walton,  2  E.  D. 
Smith  (N.  Y.)  164;  Pentz  v.  Stanton,  10  Wend.  (N.  Y.)  271,  25  Am.  Dec. 
558.  Firm  on  whom  a  draft  is  drawn  by  one  of  its  commercial  travelers 
is  not  liable  thereon  until  acceptance.  Seattle  Shoe  Co.  v.  Packard,  43 
Wash.  527,  86  Pac.  845,  117  Am.  St.  Rep.  1064. 

69  Neg.  Inst.  Laws.  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or., 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  20);  Ariz.  (§  3323);  111. 
(§  20);  Kan.  (§  27);  Md.  (§  39);  Mich.  (§  22);  Neb.  (§  20);  N.  Y.  (§  39); 
Ohio  (§  3171s);  R.  I.  (§  28);  Wis.  (§  1675-20). 

70  Frankland  v.  Johnson,  147  111.  520,  35  N.  E.  480,  37  Am.  St.  Rep.  234. 
Where  the  instrument  recites  a  promise  by  the  principal  to  pay,  and  is 


32  EXECUTION  AND  DELIVERY.  §  25 

thus  changes  the  law  as  it  generally  existed  in  this  country  prior 
to  the  enactment  of  the  statute.'''^  Under  the  law  as  it  previously 
existed,  the  only  cause  of  action  against  one  acting  as  an  agent 
without  authority  was  for  damages  upon  an  implied  warranty  of 
authority,  and  this  cause  of  action,  not  being  upon  the  instrument, 
did  not  pass  with  the  transfer  of  the  latter  unless  specifically  as- 
signed. This  provision  of  the  statute  would  seem  to  render  any 
such  assignment  unnecessary  and  to  allow  any  holder  of  the  in- 
strument to  sue  the  agent  upon  it. 

§  25.  But  the  mere  addition  of  words  describing  him  as  an 
agent,  or  as  filling  a  representative  character,  without  dis- 
closing his  principal,  does  not  exempt  him  from  personal 
liability. 

The  mere  addition  of  words  describing  the  signer  as  an  agent, 
or  as  acting  in  a  representative  capacity,  without  disclosing  his 
principal,  will  not  relieve  the  signer  from  personal  liability'^^  ^g 


signed  by  one  as  agent,  proof  that  the  ostensible  agent  had  no  authority 
to  sign  will  render  him  personally  liable.  Id.  Where  the  note  recited 
that  the  "Western  Seaman's  Friend  Society  agrees  to  pay,"  and  was 
signed  "B.  Frankland,  Gen.  Supt.,"  the  signer  was  held  to  a  personal 
liability,  it  appearing  that  he  had  no  authority  to  bind  the  society,  and 
that  it  was  the  intention  of  the  parties  that  he  be  personally  liable.  In 
the  original  draft  submitted  to  the  conference  of  commissioners  on  uni- 
formity of  laws,  the  portion  of  the  section  under  consideration  reads  as 
follows:  "Where  a  person  adds  to  his  signature  words  indicating  that 
he  signs  for  or  on  behalf  of  a  principal,  or  in  a  representative  capacity, 
he  is  not  liable  on  the  instrument."  This  is  the  rule  under  the  English 
act  and  under  the  decisions  of  some  states  prior  to  the  adoption  of  the 
Negotiable  Instruments  Act.  Miller  v.  Reynolds,  92  Hun,  400,  36  N.  Y. 
Supp.  660.  The  addition  of  the  phrase  "if  he  was  duly  authorized" 
would  seem  to  leave  the  construction  placed  on  the  section  in  the  text 
the  only  possible  one. 

71  Miller  v.  Reynolds,  92  Hun,  400,  36  N.  Y.  Supp.  660. 

72  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or., 
Pa  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  20);  Ariz.  (§  3323);  111. 
(§  20);  Kan.  (§  27);  Md.  (§  39);  Mich.  (§  22);  Neb.  (§  20);  N.  Y.  (§  39); 
Ohio  (§  3171s);  R.  I.  (§  28);  Wis.  (§  1675-20). 


§25  SIGNATURE    BY   AGENT.  Z^ 

to  innocent  purchasers  for  value.'^  But  the  statute  is  not  to  be 
taken  as  changing  the  common  law  rule  permitting  the  considera- 
tion and  the  conditions  under  which  the  instrument  was  delivered 
to  be  shown  as  between  the  original  parties  and  those  having 
notice  of  the  facts  relied  upon  as  constituting  a  defense/^  and 
hence,  as  between  the  original  parties,  it  is  not  necessary  that  the 
signer's  representative  capacity  appear  upon  the  face  of  the 
note."5  It  follows  that  the  effect  of  this  section  is  limited  to  put- 
ting the  payee  of  the  note  in  possession  of  the  knowledge  that 
in  its  execution  and  delivery  no  personal  liability  was  intended 
to  be  assumed  by  the  makers,'^  and  where  tlie  payee  knows  the 
maker  is  acting  as  an  agent  or  trustee,  the  maker  is  not  required 
to  relieve  himself  of  personal  liability,  to  repeat  to  him  in  writing 
or  orally  information  he  already  possesses.''''  In  accordance  with 
the  rule  stated,  the  word  "agent,"  or  a  similar  word,  not  dis- 
closing the  nature  of  the  agency,  or  the  name  of  the  principal, 
added  after  the  signature,  is  merely  descriptio  personae,  and  the 
signer  is  personally  liable."^    But  if  the  principal  is  plainly  dis- 


Addition  of  word  "trustee"  descriptio  personae.  Bank  v.  Looney,  99 
Tenn.  278,  42  S.  W.  149,  38  L.  R.  A.  837,  63  Am.  St.  Rep.  830.  So  held 
where  signer's  name  was  followed  by  the  word  "Secy."  Daniel  v.  Glidden, 
38  Wash.  556,  80  Pac.  811. 

73  Megowan  v.  Peterson,  173  N.  Y.  1,  65  N.  E.  738. 

74Alegowan  v.  Peterson,  173  N.  Y.  1,  65  N.  E.  738.  As  between  the 
parties,  parol  contemporaneous  agreement  conditioning  delivery  is  ad- 
missible.    Paulson  V.  Boyd,  137  Wis.  241,  118  N.  W.  841. 

75  Megowan  v.  Peterson,  173  N.  Y.  1,  65  N.  E.  738. 

76  Kerby  v.  Ruegamer,  107  App.  Div.  491,  95  N.  Y.  Supp.  408. 
77Kerby  v.  Ruegamer,  107  A-^p.  Div.  491,  95  N.  Y.  Supp.  408. 

78  Pease  v.  Pease,  35  Conn.  131,  95  Am.  Dec.  225;  Bedford  Commercial 
Ins.  Co.  V.  Covell,  49  Mass.  (8  Mete.)  442;  San  Bernardino  Nat.  Bank  v. 
Anderson  (Cal.)  32  Pac.  168;  Brunswick-Balke-Collender  Co.  v.  Boutell, 
45  Minn.  21, '47  N.  W.  261;  Pentz  v.  Stanton,  10  Wend.  (N.  Y.)  271,  25 
Am.  Dec.  558;  Cortland  Wagon  Co.  v.  Lynch,  82  Hun  (N.  Y.)  173,  31 
N.  Y.  Supp.  325;  Casco  Nat.  Bank  v.  Clark,  139  N.  Y.  307,  34  N.  E.  908, 
36  Am.  St.  Rep.  705;  Lons  v.  Miller,  6  Grat.  (Va.)  427,  52  Am.  Dec. 
129;  Bickford  v.  First  Nat.  Bank,  42  111.  238,  89  Am.  Dec.  436.  The  ad- 
dition of  the  word  "executor"  or  "administrator,"  or  the  character 
"adm'r"  or  "adm'x,"  to  the  signature,  does  not  relieve  the  signer  from 
personal  liability.     Jenkins  v.  Phillips,  58  N.  Y.  Supp.  788;  Boyd  v.  John- 

Opp.— Sel.— 3 


34  EXECUTION  AND  DELIVERY.  §  26 

closed  in  the  body  of  the  instrument,  one  signing  in  a  represent- 
ative capacity,  or  as  agent,  is  not  personally  liable,™  though  the 
signature  has  no  words  indicating  agency .^"^ 


Signature  by  "Procuration." 

§  26.  A  signature  by  "procuration"  operates  as  notice  that  the 
authority  of  the  agent  is  limited. 

A  signature  by  "procuration"  operates  as  notice  that  the 
authority  of  the  agent  is  limited;  and  the  principal  is  bound  only 
in  case  the  agent,  in  so  signing,  acted  within  the  actual  scope  of 
his  authority ,^^  except  as  to  bona  fide  holders.^ 

Delivery  — Necessity. 

§  27.  Every  contract  in  a  negotiable  instrument  is  incomplete 
and  revocable  until  delivery  of  the  instrument  for  the 
purpose  of  giving  effect  thereto. 

The  contract  evidenced  by  a  negotiable  instrument  is  not  eom- 

ston,  89  Tenn.  284,  14  S.  W.  804;  Tassey  v.  Church,  4  Watts  &  S.  (Pa.) 
346;  White  v.  Thompson,  79  Me.  207,  9  Atl.  118;  Hosteller  v.  Hoke,  17 
Kan.  81;  Morehead  Banking  Co.  v.  Moorehead,  116  N.  C.  410,  21  S.  E.  190. 

79  Whitney  v.  Inhabitants  of  Stow,  111  Mass.  368;  Haskell  v.  Cornish, 
13  Cal.  45;  Little  v.  Bailey,  87  111.  239.  In  Vliet  v.  Simanton,  63  N.  J. 
Law,  458,  43  Atl.  73S,  persons  signing  as  "trustees"  a  note  which  recited 
that  "the  trustees  of  M.  Grange,  No.  114,"  promise  to  pay,  were  held  per- 
sonally liable.  To  the  same  effect,  see  Day  v.  Ramsdell,  90  Iowa,  731,  52 
N.  W.  208,  57  N.  W.  630. 

soChipman  v.  Foster,  119  Mass.  189. 

81  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D..  Okl.,  Or.. 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  21);  Ariz.  (§3324);  111. 
(§  21);  Kan.  (§  28);  Md.  (§  40);  Mich.  (§  23);  Neb.  (§  21);  N.  Y.  (§  40); 
Ohio  (§  3171  t);  R.  I.  (§  29);  Wis.  (§  1675-21). 

This  provision  was  taken  verbatim  from  the  English  "Bills  of  Ex- 
change Act  1882"  (45  &  46  Vict.  c.  61),  §  25.  See  North  River  Bank  v. 
Aymar,  3  Hill  (N.  Y.)  262;  Bryant  v.  La  Banque  [18931  App.  Cas.  170. 

82  Bryant  v.  La  Banque  [1893]  App.  Cas.  170,  180. 


§  2S  DELIVERY.  35 

plete,  and  is  revocable  until  delivery  of  the  instrument  for  the 
purpose  of  giving  effect  thereto.^^  Delivery  means  the  transfer 
of  possession,  actual  or  constructive,  from  one  person  to  another.^* 
So,  if  the  maker  destroy  the  instrument  after  signature,  but  be- 
fore delivery,  no  recovery  can  be  had  thereon  by  the  payee  as 
upon  a  lost  instrument.®^  But  this  provision  does  not  render  a 
note  delivered  to  the  payee  and  indorsed  in  blank,  and  thereafter 
stolen  by  the  maker  and  sold  to  a  bona  fide  holder,  incomplete.®^ 

Sufficiency  of  Delivery. 

§  28.  As  against  all  parties,  except  a  holder  in  due  course,  a 
delivery,  to  be  effectual,  must  be  made  by  or  under  the 
authority  of  the  person  making,  drawing,  accepting,  or 
indorsing,  and  in  such  case  the  delivery  may  be  shown  to 
have  been  conditional,  or  for  a  special  purpose  only,  and 
not  for  the  purpose  of  transferring  the  property  in  the 
instrument. 

As  against  all  parties  except  a  bona  fide  holder,  a  delivery,  to 

83  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  ^^  C,  N.  D.,  Okl.,  Or., 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  16");  Ariz.  (§  3319);  111. 
(§  16);  Kan.  (§  23);  Md.  (§  35);  Mich.  (§  18);  Xeb.  (§  16);  N.  Y.  (§  35); 
Ohio  (§  3171  o);  R.  I.  (§  24);  Wis.  (§  1675-16). 

Polhemus  v.  Prudential  Realty  Corp.,  74  N.  J.  Law,  570,  67  Atl.  303; 
Wells  Fargo  &  Co.  v.  Vansickle,  64  Fed.  944;  Palmer  v.  Poor,  121  Ind. 
135.  22  N.  E.  984.  6  L.  R.  A.  469;  Devries  &  Co.  v.  Shumate,  53  Md.  211; 
Cowing  V.  Altman,  71  N.  Y.  435,  27  Am.  Rep.  70;  Chipmant  v.  Tucker, 
38  Wis.  43,  20  Am.  Rep.  1;  Roberts  v.  McGrath,  38  Wis.  52;  Wright  v. 
Smith,  81  Va.  Ill;  Hoit  v.  Mclntire,  50  Minn.  466,  52  N.  W.  918.  Bill  of 
exchange  paj-able  to  the  order  of  the  drawer  does  not  come  into  exist- 
ence as  such  until  it  is  delivered,  as  well  as  indorsed,  by  the  payee. 
Stouffer  V.  Curtis,  198  Mass.  560,  85  N.  E.  180. 

84  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo..  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or., 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  191);  Ariz.  (§  3487);  111. 
(§  190);  Kan.  (§  2);  Md.  (§14);  Mich.  (§  2);  Neb.  (§  189);  N.  Y.  (§  2); 
Ohio  il  3178);  R.  I.  (§  2);  Wis.  (§  1675). 

85  Sheehan  v.  Crosby,  58  Ind.  205. 

86  Massachusetts  Nat.  Bank  v.  Snow,  187  Mass.  159,  72  .NT.  E.  959. 


36  EXECUTION  AND  DELIVERY.  §  28 

be  effectual,  must  be  made  by  or  under  the  authority  of  the  per- 
son making,  drawing,  accepting,  or  indorsing.^^  An  instrument 
taken  by  the  payee  without  the  maker's  consent  is  ineffectual  for 
want  of  delivery .^^  Nor  can  a  recovery  be  had  where  a  delivery 
was  obtained  by  force  or  fraud.^^  A  delivery  to  the  payee  in  a 
sealed  envelope,^''  or  by  mailing  the  instrument  to  him,^^  is  suf- 
ficient, and  a  sufficient  constructive  delivery  takes  place  where 
the  instrument  is  left  in  a  place  accessible  to  the  payee.^^  After 
an  instrument  signed  and  delivered  in  blank  has  been  completed, 
it  relates  back  to  the  time  of  the  original  delivery,  and  a  second 
delivery  is  not  necessary .^^ 

Conditional  delivery. 

As  against  all  parties  except  a  bona  fide  holder,  the  delivery 
may  be  shown  to  be  conditional,  and  for  a  specific  purpose,  and 
not  for  the  purpose  of  transferring  the  property  in  the  instru- 
ment,^* and  the  fact  that  such  condition  rests  in  a  parol  agree- 

87  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or., 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  16);  Ariz.  (§  3319);  111. 
(§  16);  Kan.  (§  23);  Md.  (§  35);  Mich.  (§  18);  Neb.  (§  16);  N.  Y.  (§  35); 
Ohio  (§  3171  o);  R.  I.  (§  24);  Wis.  (§  1675-16). 

88  Hatton  V.  Jones,  78  Ind.  466;  Roberts  v.  McGrath,  38  V/is.  52;  Dodd 
V.  Dunne,  71  Wis.  578,  11  N.  W.  430. 

89Burson  v.  Huntington,  21  Mich.  415,  4  Am.  Rep.  497. 

90  Worth  V.  Case,  42  N.  Y.  362. 

91  Barrett  v.  Dodge,  16  R.  I.  740,  19  Atl.  530.  27  Am.  St.  Rep.  Ill;  Kirk- 
man  V.  Bank  of  America,  42  Tenn.  (2  Cold.)  397. 

92  Norton  v.  Norton,  1  N.  Y.  Supp.  552;  Babcock  v.  Benson,  58  Hun, 
601,  11  N.  Y.  Supp.  455. 

93  Davidson  v.  Lanier,  71  U.  S.  (4  Wall.)  447. 

94  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or., 
Pa.,  Tenn.,  Utah,  Va..  Wash..  W.  Va.,  Wyo.  (§  16);  Ariz.  (§  3319);  111. 
(§  16);  Kan.  (§  23);  Md.  (§  35);  Mich.  (§  18);  Neb.  (§  16);  N.  Y.  C§  35); 
Ohio  (§  3171  o);  R.  I.  (§  24);  Wis.  (§  1675-16). 

Hodge  V  Smith,  130  Wis.  326,  110  N.  W.  192;  Hill  v.  Hall,  191  Mass. 
253,  n  N.  E.  831.  See,  also,  Burke  v.  Dulaney,  153  U.  S.  228.  38  Law.  Ed. 
698;  Zimmerman  v.  Adee,  126  Ind.  15,  25  N.  E.  828;  Devries  v.  Shumate, 


§  29  DELIVERY.  37 

ment  contemporaneous  with  delivery  does  not  prevent  its  being 
proven.^5  -pj^g  condition  and  its  nonfulfillment  being  shown,  the 
contract  has  no  binding  validity .^^ 


Same — Presumptions. 


§  29.     Nonpossession  may  raise  a  presumption  of  delivery. 

Where  the  instrument  is  no  longer  in  possession  of  a  party 
whose  signature  appears  thereon,  a  valid  and  intentional  de- 
livery by  him  is  presumed  until  the  contrary  is  proved,^'^  and 
possession  by  the  payee  or  a  party  other  than  the  signer  is  prima 
facie  evidence  of  delivery ,^8  and  ownership,^^  \^fi^i  possession  by  a 

53  Md.  211;  Watkins  v.  Bowers,  119  Mass.  383;  Bernhard  v.  Brunner,  17 
N.  Y.  Super.  Ct.  (4  Bosw.)  528;  Bookstaver  v.  Jayne,  60  N.  Y.  146;  Gar- 
field Nat.  Bank  v.  Colwell,  57  Hun,  169,  10  N.  Y.  Supp.  864;  French  v. 
Wallack,  12  N.  Y.  St.  Rep.  159,  62  Am.  Dec.  152;  Bank  of  Benson  v. 
Jones,  147  N.  C.  419,  61  S.  E.  193.  But  see  Mead  v.  Nat.  Bank  of  Pawling, 
89  Hun,  102,  34  N.  Y.  Supp.  1054. 

05  Hill  V.  Hall,  191  Mass.  253,  77  N.  E.  831;  Hodge  v.  Smith,  130  Wis. 
326,  110  N.  W.  192.  Proof  of  such  condition  does  not  violate  the  rule 
that  a  written  instrument  cannot  be  varied  by  a  contemporaneous  parol 
agreement.     Hodge  v.  Smith,  130  Wis.  326,  110  N.  W.  192. 

96  Hodge  V.  Smith,  130  Wis.  326,  110  N.  W.  192. 

97  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or., 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  16);  Ariz.  (§  3319);  111. 
(§  16);  Kan.  (§  23);  Md.  (§  35);  Mich.  (§  18);  Neb.  (§  16);  N.  Y.  (§  35); 
Ohio  (§  3171  o);  R.  L  (§  24);  Wis.  (§  1675-16). 

98  Bellows  V.  Folsom,  27  N.  Y.  Super.  Ct.  (4  Rob.)  43;  Garrigus  v. 
Home,  Frontier  &  Foreign  Missionary  Soc,  3  Ind.  App.  91,  28  N.  E.  1009, 
50  Am.  St.  Rep.  262.  In  a  suit  upon  a  promissory  note,  where  the  plain- 
tiff has  possession  of  the  note,  produces  it  upon  the  trial,  and  it  is  re- 
ceived in  evidence,  such  facts  make  a  prima  facie  case  of  delivery  of  the 
note.     Gandy  v.  Bissell's  Estate,  81  Neb.  102,  115  N.  W.  571. 

99  The  presumption  of  ownership  arising  from  possession  by  the  orig- 
inal payee  is  not  affected  by  the  fact  that  the  note  bears  the  blank  in- 
dorsement of  such  payee.  Home  Sav.  Bank  v.  Stewart,  78  Neb.  624,  110 
N.  W.  947,    See,  also,  Lowell  v.  Bickford,  201  Mass.  543,  88  N.  E.  L 


38 


EXECUTION  AND  DELIVERY.  §  29 


sister  of  the  payee  is  not  sufficient  to  raise  the  presumption.i«» 
This  presumption  from  possession  by  the  payee  may  be  rebutted 
by  evidence  that  the  delivery  was  on  a  contingency  which  had 
not  happened.^°^ 


100  Gordon  v.  Adams,  127  111.  223,  19  N.  E.  557. 

101  Hurt  V.  Ford  (Mo.)  36  S.  W.  671. 


CHAPTER  IV. 


ESSENTIALS  OF  NEGOTIABILITY. 

§  30.     In  General. 

§  31.     Substantial  Compliance  Sufficient. 

§  32.     Matters  Not  Affecting  Negotiability. 

1.  Absence  of  Date. 

2.  Seal. 

3.  Failure  to  Specify  Value. 

Exception. — Requirement   that    Nature    of   the    Consideration 
be  Stated. 
§  33.     The  Promise  or  Order. 
§  34.     There  Must  be  a  Promise  or  Order  to  Pay. 

Warehouse  Receipts  and  Bills  of  Lading. 

Certificates  of  Deposit. 

Receivers'  Certificates. 

Banks'  Pass  Books. 
§  35.     The  Promise  or  Order  Must  be  Unconditional. 
§  36.     Unconditional  though  contains : 

1.  Reference  to  a  Particular  Fund  or  Account  for  Reimbursement. 

2.  Statement  of  the  Transaction. 

§  37.     Instruments  Payable  Out  of  Particular  Fund. 

Municipal  Warrants  and  Orders. 
§  38.     Sum  Certain. 
§  39.     Sum  Payable  is  a  Sum  Certain  Though  Payable. 

1.  With  Interest. 

2.  By  Stated  Instalments. 

3.  By  Stated  Instalments  with  Default  Provision. 

4.  With  Exchange. 

5.  Collection  Costs  and  Attorney's  Fees. 
§  40.     Provision  for  Taxes. 

§  41.  Must  be  Payable  in  Money. 

§  42.  Certainty  as  to  Time  of  Payment. 

§  43.  Instruments  Payable  on  Demand. 

§  44.  Overdue  Paper. 

§  45.  Fixed  or  Determinable  Future  Time. 

39 


40  ESSENTIALS    OF    NEGOTIABILITY.  §30 

§  46.     Instrument  Payable  on  Contingency. 

§  47.     Fixed  or  Determinable  Future  Time — Prior  Contingency. 

§  48.     Words  of  Negotiability. 

§  49.     Supplied  by  Indorsement. 

§  50.     Instruments  Payable  to  Order. 

§  5L     Instruments  Payable  to  Bearer. 

§  52.     Certainty  as  to  Parties. 

§  53.     Designation  of  Drawee. 

§  54.     Joint  Drawees. 

§  55.     Place  of  Payment. 

§  56.     No  Place  of  Payment  Specified. 

§  57.     Provisions  Not  Affecting  Negotiability. 

1.  Sale  of  Collateral;  Conditional  Sale  Notes. 

2.  Confession  of  Judgment. 

3.  Waiving  Statutory  Rights. 

4.  Option  to  Require  Something  in  Lieu  of  Payment  of  Money. 
§  58.     Illegal  Provisions.  >. 

In  General.  ^  /  0  (d  jOO 


<U^f. 


§  30.    An  instrument  to  be  negotiable  must  conform  to  the  fol- 
lowing requirements:^ 

1.  It  must  be  in  writing    and    signed  by  the  maker  or 

drawer ; 

2.  Must  contain  an  unconditional  promise  or  order  to  pay 

a  sum  certain  in  money ; 

3.  Must  be  payable  on  demand,  or  at  a  fixed  or  determin- 

able future  time; 

4.  Must  be  payable  to  order  or  to  bearer ;  and 

5.  Where  the  instrument  is  addresed  to  a  drawee,  he  must 

be  named  or  otherwise  indicated  therein  with  reason- 
able certainty. 

There  are  certain  essentials  of  negotiability,  such  as  a  writ- 
ten instrument,  and  a  signature  by  the  maker  or  drawer,  which 
are  primarily  essentials  to  the  valid  execution  of  the  instru- 
ment, and  such  questions  are  considered  in  the  chapter  on  "Exe- 

1  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla..  Idaho.  Iowa.  Ky.,  La., 
Mass.,  Mo.,  Mont.,  N.  H.,  N.  ]..  N.  M  ,  N  C,  M.  D.  Ok!.,  <ji..  Pa.. 
Tenn..  Utah,  Va.,  Wash..  W.  Va.,  Wyo.  (§  1):  Anz.  (§  3304..  Til. 
(§  1);  Kan.  (§  8);  Md.  (§  20);  Mich.  (§  3);  .N'eb.  (§  1);  N.  \.  (§  20), 
Ohio  (§  3171):  R.  I.  (§  9);  Wis.  (§  1675-1). 


§  32  DATE.  41 

cution  and  Delivery,"  because  more  properly  falling  under  that 
heading.2 

§  31.    Substantial  compliance  with  the  requirements  of  the  ne- 
gotiable instruments  law  is  sufficient. 

"While  the  negotiable  instruments  law  provides  that  an  instru- 
ment to  be  negotiable  "must  conform"  to  certain  specific  re- 
quirements,^  a  strict  following  of  the  language  of  the  law  is  not 
required,  but  any  terms  are  sufficient  which  clearly  indicate  an 
intention  to  conform  to  the  statutory  requirements.* 

§  32.    The  negotiabihty  of  an  instrument  is  not  affected  by  the 
fact: 

1.  That  it  is  not  dated;  or 

2.  That  it  bears  a  seal;  or 

3.  That  it  does  not  specify  the  value  given  or  that  any 

value  was  given. 

Exception.— But  nothing  herein  alters  or  repeals  any 
statute  requiring,  in  certain  cases,  the  nature  of  the 
consideration  to  be  stated  in  the  instrument. 

Date. 

As  heretofore  stated,  the  validity  of  the  instrument  is  not  af- 
fected by  the  fact  that  it  is  not  dated,^  and  the  same  rule  applies 

2  See  ante,  chapter  III. 

3Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or.,  Pa.,  Tenn., 
Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  1);  Ariz.  (§  3304);  111.  (§  1);  Kan. 
(§  8);  Md.  (§  20);  Mich.  (§  3);  Neb.  (§  1);  N.  Y.  (§  20);  Ohio  (§  3171); 
R.  I.  (§9);  Wis.  (§  1675-1). 

4Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or., 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  10);  Ariz.  (§  3313);  111. 
(§  10);  Kan.  (§  17);  Md.  (§  29);  Mich.  (§  12);  Neb.  (§  10);  N.  Y.  (§  29); 
Ohio  (§  3171  i);  R.  I.  (§  18);  Wis.  (§  1675-10). 

5  See  ante,  chapter  III.     Execution  and  Delivery,  §  13. 


42  ESSENTIALS   OF   NEGOTIABILITY.  §32 

to  its  negotiable  character.^    Not  being  dated,  it  will  be  consid- 
ered to  be  dated  as  of  the  time  it  was  issuedJ 

Seal. 

The  old  common-law  rule  that  a  seal  placed  on  an  instrument 
renders  it  a  specialty,  and  hence  non-negotiable,  is  still  in  force, 
except  as  modified  or  abolished  by  statute.^  Corporate  paper  is 
an  exception  to  the  general  rule,  and  is  not  rendered  non-nego- 
tiable at  common  law  by  the  presence  of  the  corporate  seal,^  the 

6  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C.,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or., 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  6);  Ariz.  (§  3309);  III. 
(§  6);  Kan.  (§  13);  Md.  (§  25);  Mich.  (§  8);  Neb.  (§  6);  N.  Y.  (§  25); 
Ohio  (§  3171  e);  R.  L  (§  14);  Wis.  (§  1675-6). 

Church  V.  Stevens,  56  Misc.  572,  107  N.  Y.  Supp.  310. 

7  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C.,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or., 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  17).;  Ariz.  (§  3320);  111. 
(§  17);  Kan.  (§  24);  Md.  (§  36);  Mich.  (§  19);  Neb.  (§  17);  N.  Y.  (§  36); 
Ohio  (§  3171  p);  R.  I.  (§  25);  Wis.  (§  1675-17). 

See  ante,  chapter  IV.     Execution  and  Delivery,  §   14. 

8  Rawson  v.  Davidson,  49  Mich.  607,  14  N.  W.  565;  Lewis  v.  Wilson, 
5  Blackf.  (Ind.)  370;  Brown  v.  Jordahl,  32  Minn.  135,  19  N.  W.  650,  50 
Am.  Rep.  560.  But  see  Laws  Minn.  1899,  c.  86,  abolishing  private  seals, 
and  providing  that  the  addition  of  such  a  seal  shall  not  affect  the  char- 
acter of  an  instrument  in  any  respect. 

9  Corporate  bonds,  see  American  Nat.  Bank  v.  American  Wood-Paper 
Co.,  19  R.  I.  149,  32  Atl.  305;  Evertson  v.  National  Bank  of  Newport,  66 
N.  Y.  14. 

Interest  coupons  detached  from  negotiable  bonds  are  negotiable.  In- 
ternational Imp.  Fund  Trustees  v.  Lewis,  34  Fla.  424,  16  So.  325,  43  Am. 
St  Rep.  209,  26  L.  R.  A.  743;  Evertson  v.  National  Bank  of  Newport,  66 
N.  Y.  14;  Nashville  v.  First  Nat  Bank,  60  Tenn.  (1  Baxt)  402.  Corpo- 
rate notes,  see  Jackson  v.  Myers,  43  Md.  452,  where  there  was  a  printed 
representation  of  the  corporate  seal  on  the  face  of  the  note;  Chase  Nat. 
Bank  v.  Faurot  72  Hun,  373,  25  N.  Y.  Supp.  447;  Id.,  149  N.  Y.  532,  44 
N.  E.  164,  and  Weeks  v.  Esler,  143  N.  Y.  374,  38  N.  E.  377,  in  which 
sealed  corporate  notes  were  held  negotiable,  in  the  absence  of  any  show- 
ing that  the  parties  intended  to  affix  seals;  Mackey  v.  St.  Mary's  Church, 
15  R.  I.  121,  23  Atl.  108,  2  Am.  St  Rep.  881,  where  a  corporate  note, 
sealed,  but  not  with  the  corporate  seal,  was  held  negotiable.     The  New 


§  32  SEAL.  43 

theory  being,  generally,  that  the  affixing  of  the  corporate  seal  is  a 
necessary  part  of  the  execution  of  the  instrument.^°  The  com- 
mon-law rule  has  been  abolished  by  the  negotiable  instruments 
law  by  an  express  provision  that  an  instrument  is  negotiable 
though  it  bears  a  seal.^^ 

It  follows  that,  where  the  negotiable  instruments  laws  are  in 
force,  the  distinction  and  refinements  made  by  the  courts  in  de- 
termining what  constitutes  a  seal  ^^  are  useless  learning,  so  far 
as  the  question  of  negotiability  is  concerned. 

York  negotiable  instruments  law  (§  332)  provides  that  the  owner  or 
holder  of  any  corporate  municipal  bond  or  obligation  issued  and  payable 
within  the  state,  but  not  registered,  may  make  such  bond  or  obligation, 
or  the  interest  coupon  accompanying  it,  non-negotiable  by  subscribing 
his  name  to  a  statement  indorsed  thereon,  that  such  bond,  obligation,  or 
coupon  is  his  property. 

10  But  see  Union  Bank  v.  Ridgely,  1  Har.  &  G.  (Md.)  324  (413);  Bank 
of  Columbia  v.  Patterson,  11  U.  S.  (7  Cranch)  305,  3  Law.  Ed.  540. 

11  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Maho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or., 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  6);  Ariz.  (§  3309);  111. 
(§  6);  Kan.  (§  13);  Md.  (§  25);  Mich.  (§  8);  Neb.  (§  6);  N.  Y.  (§  25); 
Ohio  (§  3171  e);  R.  L  (§  14);  Wis.  (§  1675-6). 

Addition  of  seal  to  maker's  signature  does  not  afifect  negotiable  char- 
acter of  note.  Arnd  v.  Heckert,  108  Md.  300,  70  Atl.  416;  St.  Paul's  Epis- 
copal Church  V.  Fields,  81  Conn.  670,  72  Atl.  144. 

Of  the  states  that  have  adopted  the  negotiable  instruments  law,  the 
following  previously  had  statutes  making  sealed  instruments  negotiable: 
Colo.,  Fla.,  111.,  Kan.,  Mass.,  Nev.,  N.  C,  Ohio,  Tenn.  Pate  v.  Brown,  85 
N.  C.  166.  But  see  Borden  v.  Southerland,  70  N.  C.  528;  Spense  v.  Tap- 
scott,  93  N.  C.  246.  In  the  following  sealed  instruments  were  formerly 
assignable  merely,  subject  to  defense:  Md.  (Pub.  Gen.  Laws,  art.  8,  §§ 
3,  9),  Va.  (Code,  §  2860),  Wis.  (Sanb.  &  B.  Ann.  St.  §§  2605,  2606),  D.  C. 
(Comp.  St.  c.  6,  §  3). 

The  negotiable  instr^fments  law  changes  the  rule  in  Oregon.  See  D. 
M.  Osborne  &  Co.  v.  Hubbard,  20  Or.  318,  11  L.  R.  A.  833.  But  not  in 
New  York.     Chase  Nat.  Bank  v.  Faurot,  149  N.  Y.  532.  44  N.  E.  164. 

12  Clegg  V.  Lemessurier,  15  Grat.  (Va.)  108;  Andrews  v.  Herriot,  4  Cow. 
(N.  Y.)  508;  Bates  v.  Boston  &  N.  Y.  Cent.  R.  Co.,  92  Mass.  (10  Allen) 
251;  Duncan  v.  Duncan,  1  Watts  (Pa.)  322;  D.  M.  Osborne  &  Co.  v.  Hub- 
bard, 20  Or.  318,  11  L.  R.  A.  833. 

In  Minnesota  an  instrument,  otherwise  a  negotiable  promissory  note, 
but  having  the  word  "Seal"  in  brackets  opposite  the  name  of  the  maker, 


44  ESSENTIALS    OF   NEGOTIABILITY.  §32 

Failure  to  specify  value. 

The  negotiability  of  an  instrument  is  not  affected  by  the  fact 
that  it  does  not  specify  the  value  given,  or  that  any  value  was 
given.i^  This  rule  is  merely  a  specific  application  of  the  general 
rule  that  a  consideration  for  a  negotiable  instrument  is  pre- 
sumed,^* and  is  declaratory  of  the  law,  for,  in  the  absence  of  stat- 
ute, it  has  been  uniformly  held  that  the  words  "value  received," 
or  their  equivalent,  are  not  necessary  to  negotiability.^^ 

Exception. 

The  negotiable  instruments  law  provides  that  nothing  in  the 
section  relating  to  setting  out  the  consideration  shall  repeal  any 
statute  requiring  the  nature  of  the  consideration  to  be  stated  in 
the  instrument.^^  These  provisions  refer  to  such  statutes  as  that 
of  Wisconsin,  which  provides  that  notes  taken  by  any  fire  insur- 
ance company  for  the  issuance  of  a  policy  shall  have  written  in 
the  body  thereof  the  words  "given  in  payment  for  a  policy  of 
insurance,  and,  if  transferred  before  or  after  maturity,  shall  re- 
main subject  to  all  defenses;"^''  and  the  statute  of  New  York, 
which  requires  notes  given  for  a  patent  right  to  contain  the 
words  "given  for  a  patent  right,"  and  one  given  for  the  purpose 

was  held  to  be  a  sealed  instrument,  and  not  negotiable,  though  there  was 
no  reference  to  the  seal  in  the  body  of  the  note.  Brown  v.  Jordahl,  32 
Minn.  135,  19  N.  W.  650,  50  Am.  Rep.  560. 

13  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or., 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  6);  Ariz.  (§  3309);  111. 
(§  6);  Kan.  (§  13);  Md.  (§  25);  Mich.  (§  8);  Neb.  (§  6);  N.  Y.  (§  25); 
Ohio  (§  3171  e);  R.  I.  (§  14);  Wis.  (§  1675-6). 

14  See  post,  §  59. 

15  Archer  v.  Claflin,  31  111.  306;  Benjamin  v.  Tillman,  2  McLean,  213, 
Fed.  Cas.  No.  1,304;  Coursin  v.  Ledlie's  Adm'r,  31  Pa.  506. 

16  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C.,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or.. 
Pa,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  6);  Ariz.  (§  3309);  111. 
(§  6);  Kan.  (§  13);  Md.  (§  25);  Mich.  (§  8);  Neb.  (§  6);  N.  Y.  (§  25); 
Ohio  (§  3171);  R.  I.  (§  9);  Wis.  (§  1675-7). 

17  Rev.  St.  1878,  §  1944.  This  section  was  not  repealed  by  the  negotiable 
instruments  law. 


§  34  t»ROMISE  OR  ORDER.  45 

of  speculation  in  farm  products  to  state  that  it  is  "given  for  a 
speculative  consideration."  ^^  At  one  time  there  was  considerable 
doubt  as  to  the  constitutionality  of  a  statute  requiring  notes 
given  for  patent  rights  to  recite  that  fact,  but  such  statutes  are 
now  generally  considered  as  constitutional.^^ 

The  Promise  or  Order. 

§  33.  .  The  instrument  must  contain: 

1.  A  promise  or  order; 

2.  Unconditional  in  terms; 

3.  To  pay  a  sum  certain. 

§  34.     There  must  be  a  promise  or  order  to  pay. 

Both  at  common  law  and  under  the  negotiable  instruments 
act  -^  there  must  be  a  promise  or  order  to  pay.  AVhat  consti- 
tutes a  "promise"  sufficient  to  make  an  instrument  a  promissory 
note  has  been  a  freciuent  subject  of  judicial  investigation.  In  the 
absence  of  statute,  it  has  generally  been  held  that  an  acknowl- 
edgment of  indebtedness,  either  in  the  form  of  a  duebill  or  an  "I. 
0.  U., "  does  not  contain  a  sufficient  promise,  and  in  fact  is  not 
a  new  obligation,  but  merely  new  evidence  of  the  old  debt.-^ 
Where  a  writing  contains  nothing  more  than  a  bare  acknowledg- 
ment of  a  debt,  it  does  not,  in  legal  construction,  import  an  ex- 

18  Negotiable  Inst.  Law,  §§  330,  331. 

19  New  V.  Walker,  108  Ind.  365,  9  N.  E.  386,  58  Am.  Rep.  40;  Herdic 
V.  Roessler,  109  N.  Y.  127,  16  N.  E.  198.  A  similar  statute  was  held  un- 
constitutional in  Minnesota  as  an  attempt  to  regulate  the  sale  of  patent 
rights  granted  pursuant  to  acts  of  congress.  Crittenden  v.  White,  23 
Minn.  24,  23  Am.  Rep.  676. 

20Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or. 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  1);  Ariz.  (§  3304);  111. 
(§  1);  Kan.  (§  8);  Md.  (§  20);  Mich.  (§  3);  Neb.  (§  1);  N.  Y.  (§  20); 
Ohio  (§  3171);  R.  I.  (§  9);  Wis.  (§  1675). 

21  Gray  v.  Bowden,  40  Mass.  (23  Pick.)  282;  Gay  v.  Rooke,  151  Mass. 
115,  23  N.  E.  835,  21  Am.  St.  Rep.  434;  Pepoon  v.  Stagg  &  Co.,  1  Nott  & 
McC.  (S.  C.)  102;  Currier  v.  Lockwood,  40  Conn.  349,  16  Am.  Rep.  40. 


46  ESSENTIALS    OF   NEGOTIABILITY.  §  34 

press  promise  to  pay.^  The  doctrine  of  implied  promise  lias, 
however,  been  applied  to  sustain  the  negotiability  of  instruments 
of  this  nature.22  So  it  has  been  held  that  an  instrument  reciting 
"good  to  R.  C,  or  order,  for  thirty  dollars  borrowed  money," 
contained  a  sufficient  promise,  and  was  negotiable.^*  Also  that 
one  in  the  words  "due  A  on  corn,  $525,"  was  negotiable.-^  A 
promise  to  be  "accountable"  is  equivalent  to  a  promise  to  pay,^ 
but  a  mere  statement  that  "I  owe  the  estate  of  W."  a  certain 
sum  is  not  a  negotiable,  promissory  note.^^  The  sufficiency  of  the 
"order"  in  a  bill  of  exchange  is  governed  by  similar  principles, 
and  a  direction  to  "please  let  the  bearer  have  $50.  I  will  arrange 
it  with  you  this  noon,"  was  held  to  be  a  bill  of  exchange,  and  not 
a  mere  covenant.-^  But  a  direction  to  "credit  A.,  or  bearer,  $30, 
and  I  w411  pay  you,"  does  not  constitute  a  good  bill.^* 

Same — Warehouse  receipts  and  bills  of  lading. 

Warehouse  receipts  and  bills  of  lading  are  usually  treated  as 
quasi  negotiable  instruments,  on  the  ground  that  they  do  not 
contain'  a  sufficiently  definite  promise,  and  are  not  payable  in 
money .^"^  In  some  states  receipts  issued  by  certain  warehouse  and 
storage  companies  are  still  negotiable,  for  the  statute  giving  them 


22  Smith  V.  Allen.  5  Day  (Conn.)  337. 

23  Anderson  v.  Pearce,  36  Ark.  293,  38  Am.  Rep.  39;  Lee  v.  Balcom,  9 
Colo.  126,  11  Pac.  74;  Smith  v.  Allen,  5  Day  (Conn.)  2,Z7;  Harrow  v. 
Dugan,  36  Ky.  (6  Dana)  341. 

2*  Franklin  v.  March,  6  N.  H.  364,  25  Am.  Dec.  462.  But  see  Brown  v. 
Oilman,  13  Mass.  158. 

25Jaquin  v.  Warren,  40  III.  459. 

26  Morris  v.  Lee,  1  Strange,  629. 

27  Bowles  V.  Lambert,  54  111.  237. 

28  Biesenthall  v.  Williams,  62  Ky.  (1  Duv.)  329,  85  Am.  Dec.  629. 

The  word  "please,"  or  words  of  similar  import,  do  not  affect  the  nego- 
tiability of  the  bill.  Wheatley  v.  Strobe,  12  Cal.  92,  73  Am.  Dec.  522;  Jar- 
vis  v.  Wilson,  46  Conn.  90,  33  Am.  Rep.  18;  Biesenthall  v.  Williams,  62 
Ky.  (1  Duv.)  329,  85  Am.  Dec.  629;  Mehlberg  v.  Tisher,  24  Wis.  607, 

29  Wooley  V.  Sergeant,  8  N.  J.  Law,  262,  14  Am.  Dec.  419. 

30  But  see  Canadian  Bank  of  Commerce  v.  McCrea,  106  111.  28L 


§  34  PROMISE  OR  ORDER.  47 

negotiability  ^^  was  not  repealed  by  the  negotiable  instruments 
laws.  In  "Wisconsin  warehouse  receipts,  bills  of  lading,  and  rail- 
road receipts,  are  negotiable,  unless  the  words  "not  negotiable" 
are  plainly  written,  printed,  or  stamped  on  the  face  of  the  in- 
strument.32 

Same — Certificates  of  deposit. 

A  certificate  of  deposit  payable  to  the  order  of  the  depositor  is 
negotiable,^^  and  its  negotiability  is  not  affected  by  the  fact  that 
a  demand  is  necessary  before  an  action  can  be  maintained  on  it.^* 
One  not  containing  a  promise  to  pay  is  not  negotiable,  as  it  is 
nothing  more  than  a  receipt  for  the  money  deposited.^^  g^^  ^ 
certificate  of  deposit  payable  to  the  order  of  a  named  person  at 
six  months,  with  interest,  is  a  negotiable,  promissory  note.^^ 

Same — Receivers'  certificates. 

A  receiver's  certificate  is  not  negotiable  since  it  lacks  several 
of  the  essentia]  elements  of  negotiability.^''     One  which  contains 

31  Laws  N.  Y.  1858,  c.  336,  §  6  (Laws  1872,  c.  881,  §  6;  2  Rev.  St.  1875 
p.  230,  §  6).  See  Hanover  Nat.  Bank  v.  American  Dock  &  Trust  Co., 
148  N.  Y.  612,  43  N.  E.  72,  51  Am.  St.  Rep.  721.  citing  143  N.  Y.  559;  Corn 
Exchange  Bank  v.  American  Dock  &  Trust  Co.,  149  N.  Y.  174,  43  N.  E. 
915.  The  instruments  are  transferable  without  indorsement.  Mechanics' 
Bank  of  Canada  v.  Union  R.  &  Transp.  Co.,  69  N.  Y.  373. 

Scheuermann  v.  Monarch  Fruit  Co.  (La.)  48  So.  647. 

32  Rev.  St.  1878,  §§  1676,  4194,  4425.  The  negotiable  instruments  law 
(§  1675-1,  subd.  5)  has  specially  saved  these  sections  from  repeal. 

33  Birch  V.  Fisher,  51  Mich.  36.  16  N.  W.  220;  First  Nat.  Bank  of  Rapid 
City  V.  Security  Nat.  Bank,  34  Neb.  71.  51  N.  W.  305,  33  Am.  St.  Rep 
618,  15  L.  R.  A.  386;  Pardee  v.  Fish,  60  N.  Y.  265;  Baker  v.  Leland,  9 
App.  Div.  365,  41  N.  Y  Supp.  399;  Maxwell  v.  Agnew,  21  Fla.  154;  John 
son  v.  Henderson,  76  N.  C  227;  Lindsey  v.  McClelland,  18  Wis.  481,  86 
Am.  Dec.  786. 

Effect  of  provision  .for  return  of  certificate,  see  §  35. 
s*  Pardee  v.  Fish,  60  N    Y.  265,  19  Am.  Rep.  176. 
SSHotchkiss  V.  Mosher,  48  N.  Y   482. 

36  Bank  of  Orleans  v.  Merrill,  2  Hiil  (X.  Y.)  295;  Beardsley  v.  Webber, 
104  ^lich.  88,  62  N.  W.  173. 

37  Turner  v.  Peona  &  S.  R.  Co..  95  HI.  134. 


is  ESSENTIALS    OF    NEGOTIABILITY.  §  35 

no  express  promise  to  pay,  but  merely  acknowledges  an  indebted- 
ness, payable  out  of  a  particular  fund,  is  not  negotiable  ;^^  nor 
is  one  which,  on  its  face,  recites  that  it  was  issued  under  a  special 
order  of  court.^^ 

Same — Bank  pass  books. 

A  pass  book  issued  by  a  savings  bank  is  not  a  negotiable  instru- 
ment,*'^ though  a  by-law  of  the  bank,  assented  to  by  depositors, 
provides  that  the  pass  books  shall  be  transferable  to  order.^^  An 
order  signed  by  a  depositor,  directing  payment  to  a  third  person, 
does  not  make  the  books  negotiable,^^  and  an  assignee  of  the  book 
cannot  sue  thereon  in  his  own  name.*^  On  the  same  theory,  an 
order  on  a  savings  bank  which  recites  that  the  pass  book  must 
accompany  the  order  is  not  negotiable.^* 

§,35.    The  promise  or  order  to  pay  must  be  unconditional. 

Both  under  the  negotiable  instruments  law,*^  and  at  common 
law,*^  the  instrument  to  be  negotiable  must  be  payable  uncondition- 

38  Union  Trust  Co.  v.  Chicago  &  L.  H.  R.  Co.,  7  Fed.  513. 

39  Montreal  Bank  v.  Chicago,  C.  &  W.  R.  Co.,  48  Iowa,  518. 

*o  Smith  V.  Brooklyn  Sav.  Bank,  101  N.  Y.  58,  4  N.  E.  123,  54  Am.  Rep. 
653. 

"Witte  V.  Vincenot,  43  Cal.  325. 

*2  McCaskill  v.  Connecticut  Sav.  Bank,  60  Conn.  300,  22  Atl.  568,  25  Am. 
St.  Rep.  323,  13  L.  R.  A.  737. 

43  Howard  v.  Windham  County  Sav.  Bank,  40  Vt.  597. 

44  White  V.  Cushing,  88  Me.  339,  34  Atl.  164,  51  Am.  St.  Rep.  402,  32 
L.  R.  A.  590. 

45  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Qkl.,  Or.. 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  1);  Ariz.  (§  3304);  111. 
(§  1);  Kan.  (§  8);  Md.  (§  20);  Mich!  (§  3);  Neb.  (§  1);  N.  Y.  (§  20); 
Ohio  (§  3171);  R.  L  (§  9);  Wis.  (§  1675-1). 

Knights  &  Ladies  of  Security  v.  Hibernian  Banking  Ass'n,  137  111.  App. 
175.  Instrument  directing  drawee  to  pay  "upon  acceptance"  a  stated 
amount  is  not  negotiable.  Berenson  v.  London  &  Lancashire  Fire  Ins. 
Co.,  201  Mass.  172,  S7  N.  E   687 

46  Carnahan  v.  Pell,  4  Colo.  190;  Jennings  v.  First  Nat.  Bank,  13  Colo. 
417,  22  Pac.  777,  16  Am.  St.  Rep.  210;  First  Nat.  Bank  of  Webster  v.  Alton, 


§35  UNCONDITIONAL  ORDER.  49 

ally.  Tt  is  not  in  the  rule  but  in  the  application  of  it  that  the 
courts  differ.  In  applying  the  rule  it  has  been  held  that  an  order 
directing  payment  out  of  any  money  the  drawee  might  obtain  in 
a  certain  suit,^"  and  a  promise  to  pay,  provided  a  railroad  be 
built  to  a  certain  place  by  a  certain  time,^^  are  not  negotiable. 
Where  payment  is  contingent  on  whether  the  payee,  before  ma- 
turity, shall  pay  a  certain  mortgage,  the  instrument  is  not  ne- 
gotiable.^^ As  to  the  effect  of  a  provision  for  payment  "on  re- 
turn" of  the  instrument  or  of  other  instruments,  there  is  a  con- 
flict of  opinion,5o  though  in  a  recent  case,  under  the  act,  such  a 
provision  was  held  to  render  the  instrument  non-negotiable.^^ 


60  Conn.  402,  22  Atl.  1010;   Coolidge  v.  Ruggles,  15  Mass.  387;  Grant  v. 
Wood,  78  Mass.  (12  Gray)  220;  Cook  v.  Satterlee,  6  Cow.  (N.  Y.)  108,  16 
Am.  Dec.  432;  Shelton  v.  Bruce,  17  Tenn.  (9  Yerg.)  24;  First  Nat.  Bank 
of  Stillwater  v.  Larsen,  60  Wis.  206,  19  N.  W.  67,  50  Am.  Rep.  365. 
^7  Waters  v.  Carleton,  4  Port.  (Ala.)  205. 

48  Eldred  v.  Malloy,  2  Colo.  320,  25  Am.  Rep.  752. 

49  Hays  V.  Gwin,  19  Ind.   19. 

50  Certificates  of  deposit  providing  for  payment  on  return  of  the  cer- 
tificates are  negotiable.  Fellspoint  Sav.  Inst.  v.  Weedon,  18  Md.  320,  81 
Am.  Dec.  603;  Kirkwood  v.  Exchange  Nat.  Bank,  40  Neb.  497,  58  N.  W. 
1135;  Bellows  Falls  Bank  v.  Rutland  County  Bank,  40  Vt.  377.  But, 
contra,  see  O'Neill  v.  Bradford,  1  Pin.  (Wis.)  390,  42  Am.  Dec.  574;  Leb- 
anon Bank  v.  Mangan,  28  Pa.  452;  Patterson  v.  Poindexter,  6  vVatts  &  S. 
(Pa.)  227,  40  Am.  Dec.  554. 

A  receipt  providing  for  payment  on  its  return  is  negotiable.  Frank  v. 
Wessels,  64  N.  Y.  155. 

A  note  providing  that  it  shall  be  surrendered  to  the  maker  on  payment 
of  the  note  to  the  payee  is  not  negotiable.  Hubbard  v.  Moseley,  11  Mass. 
(11  Gray)  170,  71  Am.  Dec.  698.  Nor  is  a  note  given  for  stock  which  pro- 
vides for  payment  on  surrender  of  the  stock.  Van  Zandt  v.  Hopkins, 
151  111.  248,  37  N.  E.  845.  Nor  is  an  instrument  negotiable,  payment  of 
which  is  conditioned  on  the  return  of  the  maker's  guarantee  of  a  certain 
note.     Smilie  v.  Stevens,  39  Vt.  315. 

51  A  so-called  draft,  payable  "on  presentation  of  certificate  No.  32,004, 
issued  by  K.  &  L.  of  S.  to  J.  K.,  properly  released,"  is  not  a  negotiable  in- 
strument. Knights  &  Ladies  of  Security  v.  Hibernian  Banking  Ass'n, 
137  111.  App.  175.  Compare  with  Van  Zandt  v.  Hopkins,  151  111.  248,  17 
N.  E.  845. 

Opp.— Sel.— 4 


50  ESSENTIALS    OF    NEGOTIABILITY.  §  36 

§  36.    An  unqualified  order  or  promise  to  pay  is  unconditional, 
though  coupled  with: 

1.  An  indication  of  a  particular  fund  out  of  which  re- 

imbursement  is  to  be  made,  or  a  particular  account 
to  be  debited  with  the  amount ;  or 

2.  A  statement  of  the  transaction  which  gives  rise  to  the 

instrument. 

§  37.    But  an  order  or  promise  to  pay  out  of  a  particular  fund 

is  not  unconditional. 
Reference  to  particular  fund  or  account  for  reimbursement. 

Following  the  common  law,  the  negotiable  instruments  act  pro- 
vides that  an  indication  of  a  particular  fund,  out  of  which  re- 
imbursement is  to  be  made,  or  a  particular  account  which  is  to  be 
debited  with  the  amount,  does  not  render  an  instrument  condi- 
tional,^'  a  distinction,  clear  in  the  law  but  confused  in  the  ap- 
plication, being  here  made  between  those  cases  wherein  there  is 
an  indication  of  the  fund  to  which  the  payor  or  drawee  is  ts 
look  for  reimbursement  and  those  cases  where  there  is  an  express 
or  implied  direction  to  pay  the  instrument  out  of  a  particular 
fund.^3  jn  applying  this  rule  the  courts  have  held  that  the  tact 
that  the  instrument  contains  a  direction  to  "charge"  the  amount 
against  specified  property,^*  or  to  "charge"  a  certain  accouut,^^ 

52Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Dr.. 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  3);  Ariz.  (§  3306);  111. 
(§  3);  Kan.  (§  10);  Md.  (§  2Z);  Mich.  (§  5);  Neb.  (§  3);  N.  Y.  (§  22); 
Ohio  (§  3171  b);  R.  L  (§  11);  Wis.  (§  1675-3). 

Merely  declaratory  of  common  law.  First  Nat.  Bank  v.  Lightner,  74 
Kan.  736,  88  Pac.  59,  118  Am.  St.  Rep.  353,  8  L.  R.  A.  (N.  S.)  231. 

Receiver's  certificates  not  negotiable,  see  ante,  §  34. 

53  See  post,  §  37.  First  Nat.  Bank  v.  Lightner,  74  Kan.  736,  88  Pac. 
59,  118  Am.  St.  Rep.  353,  8  L.  R.  A.  (N.  S.)  231. 

54  Order  to  "pay  to  A.  $40,  and  charge  same  against  whatever  amount 
may  be  due  me  for  my  share  of  fish,"  caught  on  a  certain  schooner.  Red- 
man V.  Adams,  51  Me.  429.  Direction  to  "charge  the  amount  against  me, 
and  (sic)  of  my  mother's  estate."  Schmittler  v.  Simon,  101  N.  Y  554, 
5  N.  E.  452,  54  Am.  Rep.  737. 

55  Direction  to  "charge  my  salary  account."  Shaver  v.  Western  Union 
Tel.  Co.,  57  N.  Y.  459. 


§37  STATEMENT   OF   TRANSACTION.  51 

or  that  it  is  "payable  out  of"  property  of  the  drawer  or  maker," 
or  that  it  is  "on  account  of "  a  certain  contract,"  does  not  render 
it  non-negotiable. 

In  a  recent  Alabama  case,  a  stipulation  in  a  note  that  "the 
makers  and  indorsers  of  this  note  *  *  *  authorize  said  bank 
to  appropriate  on  this  note,  whether  due  or  not,  at  any  time  at 
its  option,  without  notice  or  legal  proceedings,  any  money  which 
they,  or  any  one  or  more  of  them,  may  have  jointly  or  severally 
in  said  bank,  on  deposit  or  otherwise,"  was  held  not  to  destroy 
negotiability.^ 

Statement  of  transaction. 

Though  it  is  not  necessary  to  state  that  there  was  a  consid- 
eration for  an  instrument  in  order  to  render  it  negotiable,  one 
which  contains  a  statement  of  the  particular  transaction  giving 
rise  to  the  instrument  is  not  thereby  rendered  non-negotiable.^^ 
Thus,  a  promise  to  pay  a  stated  sum  for  the  privilege  of  placing 

56  On  the  same  theory,  a  promise  to  pay  "out  of  any  property  I  may 
possess."     Chickering  v.  Greenleaf,  60  N.  H.  51. 

An  indorsement  made  by  the  maker  of  a  note  on  the  back  of  the  in- 
strument that  he  is  the  owner  of  a  stated  amount  of  real  and  personal 
property  does  not  destroy  negotiability.  Hudson  v.  Emmons,  107  Mich. 
549,  65  N.  W.  542.  Instrument  made  payable  "out  of  my  share  of  the 
grain."     Corbett  v.  Clark,  45  Wis.  403,  30  Am.  Rep.  763. 

57  Words  "on  account  of  contract  between  you  and  Snyder  Planing 
Mill  Company"  held  not  a  direction  to  charge  a  particular  fund,  but 
merely  indicates  the  fund  to  which  the  drawee  is  to  look  for  reimburse- 
ment. First  Nat.  Bank  v.  Lightner,  74  Kan.  736,  88  Pac.  59,  118  Am.  St. 
Rep.  353,  8  L.  R.  A.  (N.  S.)  231. 

58  Louisville  Banking  Co.  v.  Gray,  123  Ala.  251,  26  So.  205. 

69  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl..  Or., 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  3);  Ariz.  (§  3306);  111. 
(§  3);  Kan.  (§  10);  Md.  (§  22);  Mich.  (§  5);  Neb.  (§  3);  N.  Y.  (§  22); 
Ohio  (§  3171  e);  R.  .L  (§  11);  Wis.  (§  1675-3). 

Newton  Wagon  Co.  v.  Dier,  10  Neb.  284;  Hereth  v.  Meyer,  33  Ind. 
511;  Doherty  v.  Perry,  38  Ind.  15;  Bank  of  Sherman  v.  Apperson  &  Co., 
4  Fed.  25;  First  Nat.  Bank  of  Salisbury  v.  Michael,  96  N.  C.  53,  1  S  E 
855. 

Conditional  sale  note  not  negotiable,  see  post,  §  57. 


52  ESSENTIALS    OF    NEGOTIABILITY.  §  37 

advertising  signs  in  street  ears  ^°  is  negotiable;  and  a  statement 
that  the  note  was  given  for  insurance,^^  or  for  personal  prop- 
erty,62  or  for  rent,^^  does  not  destroy  its  negotiability. 

Instruments  payable  out  of  particular  fund. 

An  instrument  payable  out  of  a  particular  fund  is  conditional, 
and  is  not  negotiable.^*  The  distinction  here  made  by  the  decis- 
ions and  by  the  negotiable  instruments  laM^s,  between  instruments 
payable  out  of  a  particular  fund  and  instruments  merely  referring 
ito  such  fund  for  reimbursement,  is  close,  but  is  logically  sound.  It 
is  clear  that  an  instrument  payable  out  of  a  particular  fund  is 
not  payable  "in  any  event,"  but  depends  for  payment  on  the 
existence  of  such  a  fund,  and  its  sufficiency  at  the  time  fixed  for 
payment.  While  the  courts  cannot  disregard  this  requirement, 
that  is,  that  an  instrument  to  be  negotiable  must  not  be  made 
payable  out  of  a  particular  fund  or  be  issued  otherwise  than  upon 
the  general  credit  of  the  maker,^^  still  it  rests  with  them  to  say 
what  facts  satisfy  this  requirement,  and  they  refrain  from  giving 
these  provisions  such  a  literal  or  impractical  interpretation  as 
will  work  unexpected  and  undesirable  results.*^^  Viewing  the 
rule  from  this  standpoint  it  has  been  held  that  bonds  of  a  joint 
stock  association  which  stipulate  that  no  shareholder  shall  be 
personally  liable  as  partner  or  otherwise  on  them,  but  that  they 

eoSiegel  v.  Chicago  Trust  &  Sav.  Bank,  131  111.  569,  23  N.  E.  417,  19 
Am.  St.  Rep.  51,  7  L.  R.  A.  537.  See,  also.  Chase  v.  Senn,  13  N.  Y.  Supp. 
266. 

61  American  Ins.  Co.  v.  Callahan,  75  Ind.  168;  Kirk  v.  Dodge  County 
Mut.  Ins.  Co.,  39  Wis.  138,  20  Am.  Rep.  39;  Union  Ins.  Co.  v.  Greenleaf, 
64  Me.  123;  Taylor  v.  Curry,  109  Mass.  36,  12  Am.  Rep.  661. 

62  Collins  V.  Bradbury,  64  Me.  Zl .  See,  also,  Preston  v.  Whitney,  23 
Mich.  260. 

Conditional  sale  note  not  negotiable,  see  post,  §  57. 

63  Buchanan  v.  Wren,  10  Tex.  Civ.  App.  560,  30  S.  W.  1077. 

64  Same  sections  of  negotiable  instruments  laws  as  last  above  cited. 
See,  also.  Tradesmen's  Nat.  Bank  of  Philadelphia  v.  Green,  57  Md.  602; 

Harriman  v.   Sanborn,  43  N.  H.   128;   Parker  v.  Syracuse,  31   N.  Y.  376; 
Cook  v.  Satterlee,  6  Cow.  (N.  Y.)  108,  16  Am.  Dec.  432. 

65Hibbs  v.  Brown,  190  N.  Y.  167,  82  N.  E.  1108. 

66Hibbs  V.  Brown,  190  N.  Y.  167,  82  N.  E.  1108. 


§  37  PARTICULAR   FUND.  53 

shall  be  payable  solely  out  of  certain  securing  trust  assets  or 
out  of  other  assets  of  the  association,  are  negotiable.^"  So,  also, 
that  an  instrument  payable  out  of  "the  growing  substance"  of 
the  drawer,^^  or  out  of  "money  in  his  hands  belonging  to  rae,"^^ 
are  not  negotiable,  nor  are  instruments  payable  out  of  the  pro- 
ceeds of  a  sale  of  certain  named  property,'^  nor  an  order  in  the 
form:  "Please  pay  to  the  order  of  W.  $600, — the  same  to  be  the 
last  $600  due  me  on  my  contract, — and  charge  the  same  to  my 
account. "^1  But  a  note  payable  on  a  certain  day,  "or  before,  if 
made  out  of  the  sale"  of  specified  property,  is  negotiable,"  since 
it  is  payable  absolutely  on  the  day  fixed,  if  not  paid  before. 

Same — Municipal  warrants  and  orders. 

Municipal  warrants  and  orders  are  not  negotiable.'^^  If  not 
made  payable  out  of  a  particular  fund,  they  are  sometimes  treated 
as  negotiable,'^*  but  are  not  considered  as  commercial  paper  in 
the  strict  sense  of  the  term."^  Where,  however,  a  municipal  war- 
rant is  payable  out  of  "any  funds  belonging  to  the  city,  not  be- 
fore specially  appropriated,"  and  is  chargeable  to  the  "general 
city  funds,"  it  is  negotiable.'^^  By  the  negotiable  instruments  law 
of  Wisconsin,  no  order  drawn  on  or  accepted  by  the  treasurer  of 
iiny  county,  town,  city,  village,  or  school  district,  is  negotiable, 

67Hibbs  V.  Brown,  190  N.  Y.  167,  82  N.  E.  1108. 

esjosselyn  v.  Lacier,  10  Mod.  294. 

69Averett's  Adm'r  v.  Booker,  15  Grat.  (Va.)  165,  76  Am.  Dec.  203. 

70  Virginia  v.  Turner,  1  Cranch,  C.  C.  261,  Fed.  Cas.  No.  16,970;  De 
Forest  v.  Frary,  6  Cow.  (N.  Y.)  151;  Lowery  v.  Steward,  25  N.  Y.  239, 
82  Am.  Dec.  346;  Jackson  v.  Tilghman,  1  Miles  (Pa.)  31. 

71  Woodward  v.  Smith,  104  Wis.  365,  80  N.  W.  440. 

72  Walker  v.  Woollen,  54  Ind.  164,  23  Am.  Rep.  639;  Noll  v.  Smith,  64 
Ind.  511,  31  Am.  Rep.  131;  Charlton  v.  Reid,  61  Iowa,  166,  16  N.  W.  64, 
47  Am.  Rep.  808;  Kiskadden  v.  Allen,  7  Colo.  206,  3  Pac.  221. 

73  Stanton  v.  Shipley,  27  Fed.  498;  Read  v.  Buffalo,  67  Barb.  (N.  Y.) 
526;  Goose  River  Bank  v.  Willow  Lake  School  Tp.,  1  N.  D.  26,  44  N.  W. 
1002. 

74  See  Floyd  County  Com'rs  v.  Day,  19  Ind.  450;  Brownlee  v.  Madison 
County  Com'rs,  81   Ind.  186. 

75  Furgerson  v.  Staples,  82  Me.  159,  19  Atl.  158,  17  Am.  St.  Re^.  470 
7G  Bull  V.  Sims,  23  N.  Y.  570. 


54  ESSENTIALS   OF   NEGOTIABILITY.  §  38 

no  matter  in  what  form  it  is  drawn,  unless  it  is  expressly  made 
negotiable  by  law.''"^  In  some  cases  negotiability  is  denied  to 
municipal  warrants  and  orders  on  the  ground  that  municipal  offi- 
cers are  not  authorized  to  execute  negotiable  instruments.'^^  The 
nature  of  municipal  warrants  is  well  stated  in  Mayor  v.  Ray  as 
follows:  "Vouchers  for  money  due,  certificates  of  indebtedness 
for  services  rendered  or  for  property  furnished  for  the  uses  of 
the  city,  orders  or  drafts  drawn  by  one  city  officer  upon  another, 
or  any  other  device  of  the  kind  used  for  liquidating  the  amounts 
legitimately  due  to  public  creditors,  are,  of  course,  necessary  in- 
struments for  carrying  on  the  machinery  of  municipal  adminis- 
tration, and  for  anticipating  the  collection  of  taxes.  But  to  in- 
vest such  documents  with  the  character  and  incidents  of  con?.- 
mercial  paper,  so  as  to  render  them  in  the  hands  of  bona  fide 
holders,  absolute  obligations  to  pay,  however  irregularly  or  fraud- 
ulently issued,  is  an  abuse  of  their  true  character  and  purpose. 
It  has  the  effect  of  converting  a  municipal  organization  into  a 
trading  company,  and  puts  it  in  the  power  of  corrupt  officials  to 
involve  a  political  community  in  irretrievable  bankruptcy."  ^^ 

§  38.    The  promise  or  order  raust  be  to  pay  a  sum  certain. 

§  39.     The  sum  payable  is  a  sum  certain  within  the  meaning  of 
the  law,  although  it  is  to  be  paid: 

1.  With  interest;  or 

2.  By  stated  instalments;  or 

3.  By  stated  instalments,  with  a  provision  that  upon  de- 

fault in  payment  of  any  instalment  or  of  interest  the 
whole  shall  become  due ;  or 

?lf  Negotiable  Inst.  Law,  §  1675-1,  subd.  5. 

78  Dana  v.  San  Francisco,  19  Cal.  490  (county  scrip  or  warrants) ;  Camp 
V.  Knox  Co.,  71  Tenn.  (3  Lea)  199;  People  v.  Supervisors,  11  Cal.  170, 
where  it  was  held  that  a  county  auditor  cannot  give  to  a  county  warrant 
"the  form  and  qualities"  of  a  bill  of  exchange. 

79  Mayor  v.  Ray,  86  U.  S.  (19  Wall.)  468,  22  Law.  Ed.  164.  See,  also, 
Police  Jury  v.  Britton,  82  U.  S.  (15  Wall.)  566,  21  Law.  Ed.  251;  State  v. 
Cook,  43  Neb.  318,  61  N.  W.  693. 


§40  SUM   CERTAIN.  55 

4.  With  exchange,  whether  at  a  fixed  rate  or  at  the  cur- 

rent rate ;  or 

5.  With  costs  of  collection  or  an  attorney's  fee,  in  case 

payment  shall  not  be  made  at  maturity. 

§  40.    But  a  provision  for  the  payment  of  taxes  or  charges  ren- 
ders the  sum  payable  uncertain. 

An  instrument,  to  be  negotiable,  must  contain  a  promise  or 
order  to  pay  a  sum  ''certain."^'*  This  provision  is  elucidated  by 
another  stating  when  the  sum  payable  is  a  sum  certain  within  the 
meaning  of  the  act.^^ 

Provision  for  interest. 

The  provision  of  the  negotiable  instruments  act  that  the  sum 
payable  is  a  sum  certain,  although  it  is  to  be  paid  with  interest,^^ 
is  in  accordance  with  the  common  law.  It  is  usual  to  provide  for 
payment  of  interest  in  promissory  notes,  and  there  is  no  reason 
why  the  notes  should  not  still  be  negotiable  if  the  provisions  for 
interest  state  a  fixed  rate  for  a  definite  time.  A  provision  for 
payment  of  interest  on  interest  to  maturity ,^^  or  even  for  usurious 
interest,^*  does  not  render  a  note  non-negotiable.  But  a  note  pay- 
so  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl..  Or.. 
Pa.,  Tenn..  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  1);  Ariz.  (§  3304);  111. 
(§  1);  Kan.  (§  8);  Md.  (§  20);  Mich.  (§  3);  Neb.  (§  1);  N.  Y.  (§  20); 
Ohio  (§  3171);  R.  I.  (§  9);  Wis.  (§  1675-1). 

A  note  payable  to  an  insurance  company  for  "$271.25,  with  such  addi- 
tional premium  as  may  arise  on  policy  No.  50,  issued  at  the  Calais 
agency,"  is  not  negotiable.  Dodge  v.  Emerson,  34  Me  96.  See,  also, 
Cushman  v.  Haynes,  Zl  Mass.  (20  Pick.)  132.  An  order  to  pay  $300  or 
what  may  be  due  on  a  specified  savings  bank  book  is  not  negotiable. 
National  Sav.  Bank  v.  Cable,  73  Conn.  568,  48  Atl.  428. 

81  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or. 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  2);  Ariz.  (§  3305);  III. 
(§  2);  Kan.  (§  9).;  Md.  (§  21);  Mich.  (§  4);  Neb.  (§  2);  N  Y.  (§  21); 
Ohio  (§  3171a);  R.  I.  (§  9);  Wis.  (§  1675-1). 
8-  Subdivision  1,  section  negotiable  instruments  laws  last  cited. 

83  Gilmore  v.  Hirst,  56  Kan.  626,  44  Pac.  603. 

84  Goodin  V.  Buhler,  57  Mo.  App.  63. 


56  ESSENTIALS   OF   NEGOTIABILITY.  §40 

able  "with  interest  the  same  as  savings  banks  pay"^^  jg  ^ot  nego- 
tiable; nor  is  one  which  is  payable  on  or  before  two  years,  witli 
interest  at  a  fixed  rate,  but  which  provides  that  it  shall  not  draw 
interest  if  paid  within  one  year.^^  A  note  providing  for  a  fixed 
rate  of  interest  if  it  is  paid  at  maturity,  but  at  a  greater  rate  if 
not  so  paid,  is  negotiable.^'' 

Instrument  payable  in  instalments. 

An  instrument  otherwise  negotiable  is  not  rendered  non-nego- 
tiable by  a  provision  for  payment  in  s-tated  or  definite  instal- 
ments.^^ It  has  even  been  held  that  a  promise  to  pay  a  certain 
sum  to  a  corporation  in  such  instalments  as  its  directors  may  re- 
quire is  negotiable,^^  on  the  theory  that  the  instalments  are  in 
such  case  payable  on  demand.  But  a  promise  to  pay  "at  such 
times  and  in  such  articles  as  the  payee  may  need  for  her  sup- 
port" is  not  negotiable.^" 

85  Whitwell  V.  Winslow,  124  Mass.  343. 

86  Lamb  v.  Storey,  45  Mich.  488,  8  N.  W.  87. 

s^Towne  v.  Rice,  122  Mass.  67;  Crump  v.  Berdan,  97  Mich.  293,  56  N. 
W.  559,  37  Am.  St.  Rep.  345;  HoUinshead  v.  John  Stuart  &  Co.,  8  N.  D. 
35,  n  N.  W.  89,  42  L.  R.  A.  659,  and  cases  cited. 

In  Minnesota  the  provision  for  additional  interest  after  maturity  is  re- 
jected as  a  penalty.  Smith  v.  Crane,  33  Minn.  144,  22  N.  W.  633,  53  Am. 
Rep.  20.  Also  in  South  Dakota.  Merrill  v.  Hurley,  6  S.  D.  592,  62  N. 
W.  958,  55  Am.  St.  Rep.  859,  distinguishing  Hegeler  v.  Comstock,  1  S.  D. 
138,  45  N.  W.  331,  8  L.  R.  A.  393.  See,  also,  De  Hass  v.  Roberts,  59  Fed. 
853. 

A  stipulation  on  the  margin  of  a  note  that  it  is  to  be  "discounted  at 
12  per  cent,  if  paid  before  maturity"  renders  the  note  uncertain  as  to  the 
amount  payable  and  destroys  negotiability.  Naticmal  Bank  of  Commerce 
V.  Feeney,  12  S  D.  156,  80  N.  W.  186,  76  Am.  St.  Rep.  594,  46  L.  R.  A. 
732. 

88  Subdivision  2,  sections  negotiable  instruments  laws  last  cited.  See, 
also,  Van  Buskirk  v.  Day,  32  111.  260;  Ewer  v.  Meyrick,  55  Mass.  (1 
Cush.)  16;  Wright  v.  Irwin,  ZZ  Mich.  32;  Chase  v.  Behrman,  10  Daly 
(N.  Y.)  344;  Chase  v.  Senn,  13  N.  Y.  Supp.  266.  But  see  Chase  v.  Kel- 
logg, 13  N.  Y.  Supp.  351. 

8«  White  V.  Smith,  11  111.  351,  20  Am.  Rep.  251.  See,  also.  President, 
etc,  of  Goshen  &  Minisink  Turnpike  Road  v.  Hurtin,  9  Jol'ns  (N.  Y.) 
217.  6  Am.  Dec.  211;  Washington  County  Mut.  Ins  to.  v.  Miller,  26 
Vt    11. 

aoCorbitt  V    Stonemetz,  15  Wis.  170,  186. 


§40  SUM   CERTAIN.  57. 

Same — Efifect  of  provision  that  def^iilt  shrJl  hu.'-tsn  maturity". 

Where  an  instrument  is  otherwise  negotiable,  it  is  not  rendered 
non-negotiable  by  a  provision  for  payment  by  stated  instalments, 
with  a  further  provision  that,  on  default  in  payment  of  any  in- 
stalment, or  of  interest,  the  whole  shall  become  due.^^  This  pro- 
vision is  illustrated  by  a  case  in  which  it  was  held  that  the  nego- 
tiability of  a  note  which  Avas  one  of  a  series,  and  referred  to  a 
contract,  was  not  destroyed  by  a  provision  in  the  contract  that 
the  whole  series  should  become  payable  at  the  option  of  the  payee 
on  default  in  payment  of  any  one  of  the  notes.'^  But  a  provision 
that  the  whole  amount  shall  become  due  whenever  the  payee 
deems  himself  insecure  ^^  renders  a  note  non-negotiable.  So,  also, 
it  has  been  held  that  a  note  payable  in  instalments  is  made  non- 
negotiable  by  a  provision  that  the  whole  amount  shall  become  due 
on  default  of  any  payment,  and  that  the  holder  could  collect  the 
same,  with  ten  per  cent  for  expenses,  or  could  sell  the  property 
for  which  the  note  was  given,  and  that,  if  there  was  any  defi- 
ciency after  sale,  the  maker  would  pay  it  on  demand.^*  Under 
this  provision  it  has  also  been  held  that  a  note  for  a  specified  sum 
and  payable  at  a  certain  future  date  is  negotiable,  though  it  pro- 
vides that  the  holder  may  declare  the  whole  amount  due  on  de- 


91  Subdivision  3,  same  sections  of  negotiable  instruments  laws  as  last 
above  cited. 

Hollinshead  v.  John  Stuart  &  Co.,  8  N.  D.  35,  11  N.  W.  89,  42  L.  R. 
A.  659,  citing  Chicago  R.  Equipment  Co.  v.  Merchants'  Bank,  136  U.  S. 
268,  34  Law.  Ed.  349;  Merrill  v.  Hurley,  6  S.  D.  592,  62  N.  W.  958,  55  Am. 
St.  Rep.  859;  Wilson  v.  Campbell,  110  Mich.  580,  68  N.  W.  278,  35  L.  R. 
A.  544;  Ernst  v.  Steckman,  74  Pa.  13,  15  Am.  Rep.  542;  Cisne  v.  Chidester, 
85  111.  523;  Walker  v.  Woollen,  54  Ind.  164,  23  Am.  Rep.  639;  De  Hass 
v.  Roberts,  59  Fed.  853. 

92  Markey  v.  Corey,  108  Mich.  184,  66  N.  W.  493,  62  Am.  St.  Rep.  698, 
Z(i  L.  R.  A.  117. 

93  Smith  V.  Marland,  59  Iowa,  645,  13  N.  W.  852;  First  Nat.  Bank  v. 
Bynum,  84  N.  C.  24,  37  Am.  Rep.  604.  Contra,  see  Heard  v.  Dubuque 
County  Bank,  8  Neb.'  10,  30  Am.  Rep.  811. 

94  W.  W.  Kimball  Co.  v.  Mellon,  80  Wis.  133,  48  N.  W.  1100. 


58  ESSENTIALS    OF    NEGOTIABILITY.  §40 

fault  in  payment  of  any  instalment  of  interest  or  failure  to  com- 
ply with  any  of  the  conditions  of  a  securing  mortgage.®* 

Provision  for  exchang'e. 

The  negotiable  instruments  laws  have  taken  a  stand  appar- 
ently against  the  weight  of  authority  by  providing  that  the  sum 
payable  is  certain,  though  the  instrument  is  payable  ''with  ex- 
change, whether  at  a  fixed  rate  or  at  the  current  rate."^^  In- 
struments with  such  provisions  have  heretofore,  in  most  jurisdic- 
tions, been  considered  as  non-negotiable.^'^  In  the  definitions  of 
a  promissory  note  or  bill  of  exchange,  it  is  generally,  if  not  al- 
ways, stated  that  the  amount  necessary  to  discharge  it  must  be 
ascertainable  from  the  face  of  the  paper  itself,  without  having  to 
refer  to  any  extrinsic  evidence.  Construing  this  definition  lit- 
erally, it  must  be  admitted  that  the  instruments  sanctioned  by 
the  statute  do  not  strictly  fall  within  it,  for,  of  course,  extrinsic 
evidence  must  be  resorted  to  in  order  to  ascertain  the  rate  of  ex- 

95  Thorp  V.  Windeman,  123  Wis.  149,  101  N.  W.  417,  107  Am.  St.  Rep. 
1003.  See,  also,  Stark  v.  Olson,  44  Neb.  646,  63  N.  W.  Z7\  Merrill  v.  Hur- 
ley, 6  S.  D.  592,  62  N.  W.  958,  55  Am.  St.  Rep.  859;  Phelps  v.  Sargent, 
69  Minn.  118,  71  N.  W.  927;  American  Nat.  Bank  v.  American  Wood- 
Paper  Co.,  19  R.  I.  149,  32  Atl.  305,  61  Am.  St.  Rep.  746,  29  L.  R.  A.  103. 
See,  also,  cases  cited  in  note  91,  supra. 

96  Subdivision  4,  sections  of  negotiable  instruments  law  last  above  cited. 
The  negotiable  instruments  laws  change  the  rule  m  D.  C,  Iowa,  N.  C, 
Wis.  See  Russell  v.  Russell,  8  D.  C.  (1  McArthur)  263;  First  Nat.  Bank 
V.  Bynum,  84  N.  C.  24;  Morgan  v.  Edwards,  53  Wis.  599,  11  N.  W.  21, 
40  Am.  Rep.  365;  First  Nat.  Bank  of  Stillwa-ter  v.  Larsen,  60  Wis.  206, 
19  N.  W.  67,  40  Am.  Rep.  781;  Peterson  v.  Stoughton  State  Bank,  78  Wis. 
113,  47  N.  W.  368;  Culbertson  v.  Nelson,  93  Iowa,  187,  61  N.  W.  854,  27 
L.  R.  A.  222. 

97  Windsor  Sav.  Bank  v.  McMahon,  38  Fed.  283,  3  L.  R.  A.  192;  Hughitt 
V.  Johnson,  28  Fed.  865;  Culbertson  v.  Nelson,  93  Iowa,  187,  57  Am.  St. 
Rep.  266,  27  L.  R.  A.  222;  Read  v.  McNulty,  12  Rich.  Law  (S.  C.)  445. 
Provision  is  for  "exchange  and  costs  of  collection."  Second  Nat.  Bank 
of  Aurora  v.  Basuier,  12  C.  C.  A.  517,  65  Fed.  58;  Nicely  v.  Commercial 
Bank,  15  Ind.  App.  563,  44  N.  E.  563.  For  exchange  on  a  place  different 
from  the  place  of  payment.  Read  v.  McNulty,  12  Rich.  Law  (S.  C.)  445; 
Flagg  v.  School  Dist.  No.  70,  4  N.  D.  30,  58  N.  W.  499,  25  L.  R.  A.  363. 
But  an  instrument  payable  at  the  place  where  it  is  drawn  is  negotiable, 


§40  SUM   CERTAIN.  59 

change  at  a  given  time  between  Uxo  places.^^  However,  the  rea- 
son and  purpose  of  the  rule  that  the  sum  to  be  paid  must  be  cer- 
tain is  that  the  parties  to  the  instrument  may  know  the  amount 
necessary  to  discharge  it,  without  investigating  facts  not  within 
the  general  knowledge  of  every  one,  and  which  may  be  subject 
to  more  or  less  uncertainty,  or  more  or  less  under  the  influence 
or  control  of  one  or  another  of  the  parties  to  the  instrument.  The 
provision  for  the  payment  of  the  current  rate  of  exchange  be- 
tween the  place  of  payment  and  some  other  place  is  not  within 
the  reason  of  this  rule,  or  subject  to  the  evils  or  inconveniences 
which  it  was  designed  to  prevent.  "While  the  rate  of  exchange 
is  not  always  the  same,  and  while  it  is  technically  true  that  resort 
must  be  had  to  extrinsic  evidence  to  ascertain  what  it  is,  yet  the 
current  rate  of  exchange  between  two  places  at  a  particular  date 
is  a  matter  of  common  commercial  knowledge,  or  at  least  easily 
ascertainable  by  any  one,  so  that  the  parties  can  always,  without 
difficulty,  ascertain  the  exact  amount  necessary  to  discharge  the 
paper.  It  would  seem,  therefore,  that  within  the  spirit  of  the  rule 
requiring  precision  in  the  amount  to  be  paid,  a  provision  for  the 
payment  of  the  current  rate  of  exchange  in  addition  to  the  prin- 
cipal amount  named  does  not  introduce  such  an  element  of  un- 
certainty as  deprives  the  instrument  of  the  essential  qualities  of 
a  promissory  note.^^ 

Provision  for  costs  or  attorneys'  fees. 

Negotiability  is  not  destroyed  by  a  provision  in  the  instru- 
ment for  payment  of  costs  of  collection  or  an  attorney's  fee  in 
case  payment  shall  not  be  made  at  maturity.'"".    The  courts  in 

though  it  provides  for  exchange,  the  provision  in  such  case  being  nuga- 
tory. Hill  V.  Todd,  29  111.  101;  Christian  County  Bank  v.  Goode,  44  Mo. 
App    129;  Orr  v.  Hopkins,  3  N.  M.  45.  1   Pac.  181. 

98  Hastings  v.  Thompson,  54  Minn.  1S4,  55  N.  W.  968,  40  Ana.  St.  Rep. 
315,  21  L.  R.  A.  178. 

99  Hastings  v.  Thompson,  54  Minn.  184,  55  N.  W.  968,  40  Am.  St.  Rep. 
315,  21  L.  R.  A.  178. 

100  Subdivision  5,  same  sections  of  negotiable  instruments  laws  as  last 
above  cited.  McCornick  v.  Swem  [Utah]  102  Pac.  626;  Pirst  Xa.L  Bank 
v.  Miller,  139  Wis.  126,  120  N.  W.  820. 


60  ESSENTIALS    OF    NEGOTIABILITY.         -  §  -10 

the  various  states  have  been  nearly  evenly  divided  on  the  ques- 
tion of  the  negotiability  of  instruments  with  such  provisions. 
If  the  weight  of  authority  can  be  said  to  be  one  way,  it  probably 
leans  toward  the  rule  as  stated  here.^°^  The  federal  courts  have 
uniformly  held  that  provisions  for  costs  of  collection  and  attor- 
neys' fees  do  not  destroy  negotiability.^"^  Where  the  provision 
for  an  attorney's  fee  is  void  as  a  provision  for  a  penal ty,^°^  or  is 

101  That  such  instruments  are  negotiable  has  been  decided  in  the  fol- 
lowing cases:  Louisville  Banking  Co.  v.  Gray,  123  Ala.  251,  26  So.  205, 
82  Am.  St.  Rep.  120;  First  Nat.  Bank  v.  Slaughter,  98  Ala.  602,  14  So. 
545,  39  Am.  St.  Rep.  88;  Stapleton  v.  Louisville  Banking  Co.,  95  Ga.  802, 
23  S.  E.  81;  Jones  v.  Crawford,  107  Ga.  318,  33  S.  E.  51,  45  L.  R.  A.  105; 
Dorsey  v.  Wolfif,  142  111.  589,  32  N.  E.  495,  34  Am.  St.  Rep.  99,  18  L. 
R.  A.  428;  Proctor  v.  Baldwin,  82  Ind.  370;  Shenandoah  Nat.  Bank  v. 
Marsh,  89  Iowa,  273,  56  N.  W.  458,  48  Am.  St.  Rep.  381;  Gilmore  v.  Hirst, 
56  Kan.  626,  44  Pac.  603;  Clifton  v.  Bank  of  Aberdeen,  75  Miss.  929,  23 
So.  394;  Benn  v.  Kutzschau,  24  Or.  28,  32  Pac.  763;  Oppenheimer  v.  Farm- 
ers' &  Merchants'  Bank,  97  Tenn.  19,  36  S.  W.  705,  56  Am.  St.  Rep.  778, 
33  L.  R.  A.  767;  Second  Nat.  Bank  v.  Anglin,  6  Wash.  403,  33  Pac.  1056; 
Salisbury  v.  Stewart,  15  Utah,  308,  49  Pac.  Ill,  62  Am.  St.  Rep.  934; 
Stadler  v.  First  Nat.  Bank,  22  Mont.  190,  56  Pac.  111.  74  Am.  St.  Rep.  600. 
That  such  instruments  are  not  negotiable  has  been  decided  in  the  follow- 
ing cases:  Adams  v.  Seaman,  82  Cal.  636,  23  Pac.  53,  7  L.  R.  A.  224.  in 
which  the  provision  considered  was  for  a  five  per  cent,  fee  on  the  accrued 
principal  and  interest  in  case  of  suit;  Maryland  Fertilizing  &  Mfg.  Co. 
V.  Newman.  60  Md.  584,  45  Am,  Rep.  750;  Cayuga  County  Nat.  Bank  v. 
Purdy,  56  Mich.  6.  22  N.  W.  93;  Altman  v.  Rittershofer,  68  Mich.  287, 
36  N.  \V  74,  13  .\m.  St.  Rep.  .341;  Jones  v.  Radatz,  27  Minn.  240,  6  N.  W. 
800;  First  N'ar.  Bank  v.  Gay,  71  Mo.  627;  First  Nat.  Bank  v.  Bynum,  84 
N.  C.  24,  TH  Am.  Rep.  604;  First  Nat.  Bank  of  Decorali  v.  Laughlin.  4 
N.  D.  391.  61  N.  W.  473;  Johnston  v.  Specr,  92  Pa.  227,  Z1  Am.  Rep. 
675;  First  Nat.  Bank  of  Stillwater  v.  Larsen,  60  Wis,  206,  19  N.  W.  67, 
50  Am.  Rep.  365;  Peter.son  v.  Stoughlon  State  Bank,  78  Wis.  113.  47  N. 
W.  368.  It  will  he  seen  from  the  above  decisions  that  the  negotiable  in- 
struments laws  have  affirmed  the  rule  previously  in  force  in  Oregon.  Ten- 
nessee, Washington,  and  Utah;  but  has  changed  the  rule  previously  m 
force  in  Maryland,  N'orth  Carolina,  North  Dakota,  Pennsylvania  and  Wis- 
consin. 

102  Wilson  Sewing  Mach.  Co.  v.  Moreno,  7  Fed.  806;  Adams  v.  Adding- 
ton.  16  Fed.  89;  Srhlesinger  v.  Arliue,  31  P'ed.  648;  Farmers"  Nat.  Bank 
v.  Sutton  Mfg.  Co.,  3  C.  C.  A.  1,  52  Fed.  19t,  17  L.  R.  A.  595. 

103  Boozer  v.  Anderson,  42  Ark.   167;  Bullock  v.  Taylor,  3*9  Mich.   137. 


^40  S'^^'^l  fi^^^^   CERTAIN.  61 

forbidden  by  statute/"*  it  does  not  destroy  negotiability.  The 
negotiable  instruments  law  of  North  Carolina  provides  that  noth- 
ing in  the  act  shall  allow  enforcement  of  the  provision  for  costs 
of  collection  or  attorneys'  fees,  though  the  provision  does  not 
affect  negotiability.i°5  -phe  reason  why  the  ordinary  provision 
for  an  attorney's  fee  does  not  destroy  negotiability  is  given  by 
Magruder,  J.,  in  Dorsey  v.  Wolff,  as  follows:  "The  promise  to 
pay  the  attorney's  fee  is  a  promise  to  do  something  after  the  note 
matures.  It  does  not  affect  the  character  of  the  note  before  or 
up  to  the  time  of  its  maturity,  either  as  to  certainty  in  the 
amount  to  be  paid,  or  fixedness  in  the  date  of  payment,  or  defi- 
niteness  in  the  description  of  the  person  to  whom  the  payment  is 
to  be  made."^°^  The  court  in  this  case  states,  however,  that  a 
provision  for  attorneys'  fees  so  worded  as  to  render  the  amount 
payable  at  maturity  uncertain  would  destroy  negotiability.  The 
same  reason  is  given  in  a  leading  Iowa  case,  where  the  court 
said:  "When  they  (the  notes  in  suit)  matured,  no  inquiry  was 
necessary  to  be  made  as  to  facts  not  apparent  on  the  face  of  the 
notes,  in  order  to  fix  the  amount  due.  Recovery  could  have  been 
liad  upon  the  notes  themselves,  without  other  evidence.  The 
agreement  for  the  payment  of  attorneys'  fees  in  no  sense  in- 
creased the  amount  of  money  payable  when  the  notes  fell  due, 
and  we  are  unable  to  see  that  it  rendered  tliat  amount  uncertain 
in  the  least  degree."  '^^ 

33  Am.  Rep.  356;  Rixy  v.  Pearre,  89  Va.  113,  IS  S.  E.  498.  But  see  Ne- 
gotiable Inst.  Law  Va.  (§  2,  subd.  5). 

104  Chandler  v.  Kennedy,  8  S.  D.  56,  65  N.  W.  439,  the  statute  involved 
being  Laws  1889,  c.  16,  §  1. 

Conditional  agreements  for  attorneys'  fees  are  void  in  Indiana  (Rev. 
St.  1881,  §  5518),  but  unconditional  stipulations  for  such  fees  are  valid. 
Garver  v.  Pontious,  66  Ind.  191;  Tuley  v.  McClung,  67  Ind.  10;  Harvey 
V.  Baldwin,  124  Ind.  59,  24  N.  E.  347,  26  N.  E.  222.  The  Indiana  statute 
does  render  void  an  agreement  to  pay  attorneys'  fees  on  the  implied  con- 
dition that  they  shall  be  payable  only  in  case  of  dishonor.  Farmers'  Nat. 
Bank  v.  Sutton  Mfg.  Co.,  52  Fed.  191,  17  L.  R.  A.  595. 

105  Negotiable  Inst.  Law,  §  197. 

106  Dorsey  v.  Wolff,  142  111.  589,  32  N.  E.  395,  34  Am.  St.  Rep.  99,  15 
L.  R.  A.  428. 

107  Sperry  v.  Horr,  32  Iowa,  184. 


62  ESSENTIALS    OF   NEGOTIABILITY.  §40 

Provision  for  payment  of  tsi^res  or  charges. 

The  negotiable  instruments  laws  do  not  expressly  provide  for 
instruments  containing  provisions  for  payment  of  taxes  or  char- 
ges; but,  under  the  law  merchant,  which  is  to  control  in  cases 
not  provided  for,^"®  such  provisions  render  an  instrument  non- 
negotiable.^°^  Thus,  where  a  provision  in  a  note  was  for  the  pay- 
ment of  all  taxes  and  charges  that  might  be  levied  on  the  note, 
or  on  a  mortgage  which  it  secured,  or  on  the  principal  or  interest 
money,  the  instrument  Vvas  not  negotiable.^^°  Also,  where  a  note 
referred  to  a  mortgage  which  required  payment  of  all  taxes  and 
assessments  before  the.y  became  delinquent,  in  default  of  which 
the  note  should  become  immediately  due  and  payable,  the  note 
was  not  negotiable,^^^  though  it  has  been  held  that  where  the 
maker  of  a  note,  negotiable  on  its  face,  executed  at  the  same 
time  a  deed  of  trust  to  secure  it,  a  covenant  in  such  deed  that,  on 
default  in  payment  of  taxes  by  the  grantor,  the  grantee  might 
pay  them,  in  which  case  the  amount  thereof  should  be  added  to 

the  debt,  the  provision  as  to  taxes  did  not  render  the  amount  un- 
certain.^12 

§  41.  The  instrument  must  be  payable  in  money,  though  it  is 
immaterial  that  it  designates  the  particular  kind  of  cur- 
rent money  in  which  payment  is  to  be  made. 

The  requirement  of  the  negotiable  instruments  laws  that  the 
promise  shall  be  to  pay  a  sum  certain  in  "money"  ^^^  is  declara- 
tory of  the  law.i^* 

108  See  ante,  §  4. 

109  Walker  v.  Thompson,  108  Mich.  686,  66  N.  W.  584;  Carmody  v. 
Crane,  110  Mich.  508,  68  N.  W.  268;  Howell  v.  Todd,  Fed.  Cas.  No.  6,783. 

iioFarquhar  v.  Fidelity  Ins.  Co.,  Fed.  Cas.  No.  4,676. 

111  Wistrand  v.  Parker,  7  Kan.  App.  562,  52  Pac.  59. 

112  Frost  V.  Fisher,  13  Colo.  App.  322,  58  Pac.  872. 

113  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or., 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  1);  Ariz.  (§  3304)  ;J11. 
(§  1);  Kan.  (§  8);  Md.  (§  20);  Mich.  (§  3);  Neb.  (§  1);  N.  Y.  (§  20); 
Ohio  (§  3171);  R.  I.  (§  9);  Wis.  (§  1675-1). 

11*  Hodsres  V.  Clinton,  1  N.  C.  19;  Fry  v.  Rousseau,  3  McLean,  106,  Fed 
Cas.  No.  5,141. 


§41  PAYABLE  IN  MONEY.  63 

Instruments  may  be  payable  in  particular  kind  of  current  money. 

The  negotiable  character  of  an  instrument  is  not  affected  by 
the  fact  that  it  designates  a  particular  kind  of  current  money  in 
which  payment  is  to  be  made.^^^  Thus,  an  instrument  is  payable 
in  money  if  payable  in  "pounds  sterling,"  ^^^  or  in  "cash 
notes, "^^^  or  in  "gold  dollars, "^^^  or  in  "Mex.  silv.  dollars;""^ 
but  is  not  payable  in  money  if  payable  in  "bank  stock, "^^^  or 
in  "current  bank  notes,"  ^-'  or  in  "current  funds,"  ^^2  or  in  " cur- 
rency. "^^^  A  note  payable  at  New  York  "in  New  York  funds, 
or  their  equivalent,"  is  not  negotiable  because  "the  term  'New 
York  funds,'  it  is  presumed,  may  embrace  stocks,  bank  notes, 
specie,  and  every  description  of  currency  which  is  used  in  com- 
mercial transactions."^-*     But  a  note  payable  in  "bank  notes 

116  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev..  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or., 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  6);  Ariz.  (§  3309);  111. 
(§  6);  Kan.  (§  13);  Md.  (§  25);  Mich.  (§  8);  Neb.  (§  6);  N.  Y.  (§  25j; 
O'hio  (§  3171  e);  R.  I.  (§  14);  Wis.  (§  1675-6). 

116  King  V-  Hamilton,  12  Fed.  478. 

117  See  Ward  v.  Lattimer,  2  Tex.  245. 
lis  Chrysler  v.  Renois,  43  N.  Y.  209. 

119  Hogue  V.  Williamson,  85  Tex.  553,  34  Am.  St.  Rep.  823,  20  L.  R. 
A.  481. 

120  Markley  v.  Rhodes,  59  Iowa,  57,  12  N.  W.  775. 

121  Little  V.  Phenix  Bank,  7  Hill  (N.  Y.)  359;  State  v.  Carpenting,  32 
N.  C.  (10  Ired.  Law)  58;  Wolfe  v.  Tyler,  48  Tenn.  (1  Heisk.)  313.  So 
of  a  noite  payable  in  "bank  bills.'"  Jones  v.  Fales,  4  Mass.  245;  Childress 
V.  Stnart,  7  Tenn.  (Peck.)  276;  Deberr}'  v.  Darnell,  13  Tenn.  (5  Yerg.) 
451,  where  an  instrument  payable  in  "North  Carolina  bank  notes'"  was 
held  negotiable. 

122  Jo.hnson  v.  Henderson.  76  N.  C.  227;  Lindsey  v.  McClelland.  18  Wis. 
481.  506,  86  Am.  Dec.  786;  Wright  v.  Hart,  44  Pa.  454.  Contra,  see  Bull  v. 
Bank  of  Kasson,  123  U.  S.  105,  31  Law.  Ed.  97. 

Parol  evidence  is  admissible  to  show  that  the  parties  intended  to  pay 
in  money.  Haddock  v.  Woods,  46  Iowa,  433.  An  instrument  payable 
in  "current  funds"  rnay  be  shown  by  evidence  of  custom  to  be  payable 
in  money.    American  Immigrant  Co.  v.  Clark,  47  Iowa,  671. 

i23Ruidskoff  V.  Barrett,  11  Iowa,  172.  Contra,  see  Butler  v.  Paine.  8 
Minn.    (Gil.  284)   324. 

124  Hasbrook  v.  Palmer,  2  McLean,  10,  Fed.  Cas.  No.  6.188,  criticising 
Keith  V.  Jones,  9  Johns.  (N.  Y.)  120,  and  Judah  t.  Harris,  19  Johns.  (N. 
Y.)   144. 


64  ESSENTIALS   OF   NEGOTIABILITY,  §41 

current  in  the  city  of  New  York"  has  been  held  negotiable ;  ^^ 
so,  also,  a  note  payable  in  "York  State  bills  or  specie."  ^^e  j^. 
struments  payable  in  foreign  money  have  been  held  negotiabie,^^" 

but  one  payable  in  New  York  "in  Canada  money"  has  been  held 
non-negotiable.^2s 

Instruments  payable  in  services  or  merchandise  —  Instruments 
payable  in  alterna,tive. 

Instruments  payable  in  services,^^^  or  in  merchandise,^^°  or  in 
the  alternative  in  money  or  merchandise, ^^^  or  in  money  or  bank 
stock,i^2  are  not  negotiable. 

Same — Warehouse  receipts,     ^/^i^  •  f  ^  Cp  / 

An  exception  to  the  rule  that' instruments  payable  in  merchan- 
dise are  not  negotiable  is  found  in  the  case  of  warehouse  reeeii^ts 
which  are  negotiable  in  some  states.^^^ 

Certainty  as  to  Time  of  Payment. 

§  42.    The  instrument  must  be  payable  i^^i 

1.  On  demand;  or 

2.  At  a  fixed  or  determinable  future  time. 

135  Keith  V.  Jones,  9  Johns.  (N.  Y.)  120. 

126  Judah  V.  Harris,  19  Johns.  (N.  Y.)  144. 

127  Sec  Singer  v.  Stimpson,  8  Mass.  260. 

12S  Thompson  v.  Sloan,  23  Wend.  (N.  Y.)  71,  35  Am.  Dec.  546. 

129  Ransom  v.  Jones,  2  111.  291;  Prather  v.  McEvoy,  8  Mo.  661;  Quimby 
V.  Meruitt,  30  Tenn.  (11  Humph.)  439. 

isopeddicord  v.  Whittam,  9  Iowa,  471;  Gushee  v.  Eddy,  77  Mass.  (11 
Gray)  502,  71  Am.  Dec.  728;  Coyle's  Ex'r  v.  Satterwhite's  Adm'r,  20  Ky. 
(4  T.  B.  Mon.)  124;  Tibbets  v.  Gerrish,  25  N.  H.  41,  57  Am.  Dec.  30.7; 
Brown  v.  Richardson,  20  N.  Y.  472;  Rhodes  v.  Lindly,  3  Ohio,  51. 

131  Thompson  v.  Gaylord,  3  N.  C.  326;  Looney  v.  Pinckston,  1  Tenn. 
383:  Lawrence  v.  Dougherty,  13  Tenn.  (5  Yerg.)  435. 

i32  Alexander  v.  Oaks,  19  N.  C.  (2  Dev.  &  B.  Law)  513. 

133  See  ante,  §  34. 

134  N eg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.   H.,  N.  J.,  N.   M.,  N    C,  N.  D.,  Oki.,  Or., 


§4-1  TIME  OF  PAYMENT.  65 

Instruments  Payable  on  Demand. 

§  43.    An  instrument  is  payable  on  demand: 

1.  Where  it  is  expressed  to  be  payable  on  demand,  or  at 

sight,  or  on  presentation; 

2.  In  which  no  time  for  payment  is  expressed. 

§  44.  Where  an  instrument  is  issued,  accepted,  or  indorsed  when 
overdue,  it  is,  as  regards  the  person  so  issuing,  accepting 
or  indorsing  it,  payable  on  demand. 

Instruments  payable  on  demand,  at  sight,  or  on  presentation. 

Instruments  payable  on  demand,  at  sight,  or  on  presentation, 
are  payable  on  demand.^^^  A  note  is  payable  on  demand  when 
made  payable  at  the  maker's  "convenience,"  ^^^  or  ''at  any  time 
called  for,"  ^37  or  "on  demand,  with  interest  after  four  months, "^^^ 
or  when  made  payable  on  the  "first  day  of  March,"  without  nam- 
ing the  year,^39  qj.  when  made  payable  "on  demand,  with  interest 
within  six  months  from  date,"  '^°  The  majority  of  the  negotiable 
instruments  laws  place  "demand"  and  "at  sight"  paper  on  the 
same  basis,  and  in  those  states  where  days  of  grace  have  been 


Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  1);  Ariz.  (§  3304);  111. 
f§  1);  Kan.  (§  8);  Md.  (§  20);  Mic^h.  (§  3);  Neb.  (§  1);  N.  Y.  (§  20); 
Ohio  (§  3171);  R.  I.  (§  9);  Wis.  (§  1675-1), 

135  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or., 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  7);  Ariz.  (§  3310);  111. 
(§  7);  Kan.  (§  14);  Md.  (§  26);  Mich.  (§  9);  Neb.  (§  7);  N.  Y.  (§  26); 
Ohio  (§  3171  f);  R.  I.  (§  IS);  Wis.  (§  1675-7). 

136  Colgate  V.  Buckingham,  39  Barb.  (N.  Y.)  177,  where  the  instrument 
was  payable  at  "such  time  or  times  as  the  directors  required."  Smithers 
V.  Junker,  41  Fed.  101,  7  L.  R.  A.  264;  Gaytes  v.  Hibbard,  5  Biss.  99,  Fed. 
Cas.  No.  5,287. 

137  Bowman  v.  McChesney,  22  Grat.  (Va.)  609. 

138  Newman  v.  Kittelle,  30  Mass.  (13  Pick.)  418. 

139  Collins  V.  Trotter,  81  Mo.  275. 

iwjilson  V.  Hill,  70  Mass.  (4  Gray)  316.  See,  also,  Gove  v.  Downer,  59 
Vt.  139,  7  Atl.  463. 

Opp. — Sel. — 5 


66  ESSENTIALS   OF   NEGOTIABILITY.  §44 

abolished  there   is  no   practical  difference  between  instruments 
payable  on  demand  and  those  payable  at  sight.^" 

Instruments  not  stating  time  of  payment. 

Instruments  failing  to  state  a  time  for  payment  are  payable  on 
demand.  This  is  the  rule  of  the  law  merchant  '^^  and  of  the  nego- 
tiable instruments  laws.^^^  "Where  no  time  of  payment  is  given, 
parol  evidence  is  admissible  to  show  a  contemporaneous  oral 
agreement  fixing  the  time."* 

Instruments  issued,  accepted,  or  indorsed  when  overdue. 

Where  an  instrument  is  issued,  accepted,  or  indorsed  when 
overdue,  it  is  as  regards  the  person  so  issuing,  accepting,  or  in- 
dorsing, payable  on  demand."^  As  to  an  indorsement  after  the 
paper  is  overdue,  the  rule  here  stated  is  the  one  in  force  in  the 
federal  "^  and  in  most  of  the  state  ^*''  courts.  The  indorsement 
after  maturity  is  considered  as  the  making  of  a  new  instrument 

•1«  See  post,  §  186. 

i42Keyes  v.  Fenstermaker,  24  Cal.  329;  Bacon  v.  Page,  1  Conn.  404; 
Green  v.  Drebilbis,  1  G.  Greene  (Iowa)  552;  Porter  v.  Porter,  51  Me.  376; 
Herrick  v.  Bennet,  8  Johns.  (N.  Y.)  374;  Ervin  v.  Brooks,  111  N.  C.  358, 
16  S.  E.  240;  Dodd  v.  Denny,  6  Or.  156;  Messmore  v.  Morrison,  172  Pa. 
300;  Husbrook  v.  Wilder,  1  Pin.  (Wis.)  643. 

1*3  Subdivision  2,  same  sections  of  negotiable  instruments  laws  as  last 
above  cited.     McLeod  v.  Hunter,  29  Misc.  558,  61  N.  Y.  Supp.  73. 

144  Horner  v.  Horner,  145  Pa.  258,  23  Atl.  441;  Ross  v.  Espy,  66  Pa.  481, 
S  Am.  Rep.  394. 

145  Same  subdivision  and  sections  of  nego^tiable  instruments  laws  as 
last  above  cited. 

146  Cox's  Adm'r  v.  Jones,  2  Cranch,  C.  C.  370,  Fed.  Gas.  No.  3,303; 
Stewart  v.  French,  2  Cranch,  C.  C.  300,  Fed.  Gas.  No.  13,427. 

147  Branch  Bank  at  Montgomery  v.  Gafifney,  9  Ala.  153;  Jones  v.  Rob- 
inson, 11  Ark.  504,  54  Am.  Dec.  212;  Levy  v.  Drew,  14  Ark.  334;  Beer  v. 
Clifton,  98  Cal.  323,  32  Pac.  204,  35  Am.  St.  Rep.  172,  20  L.  R.  A.  327; 
Bishop  v.  Dexter,  2  Conn.  419;  Graul  v.  Strutzel,  53  Iowa,  712,  6  N.  W. 
119,  36  Am.  Rep.  250;  Goodwin  v.  Davenport,  47  Me.  112,  74  Am.  Dec. 
478;  Colt  V.  Barnard,  35  Mass.  (18  Pick.)  260,  29  Am.  Dec.  584;  Van 
Hoesen  v.  Van  Alstyne,  3  Wend.  (N.  Y.)  75,  79;  Leavitt  v.  Putnam,  3  N. 
Y.  Super.  Ct.  (1  Sandf.)  199;  Bassenhorst  v.  Wilby,  45  Ohio  St.  333,  13 


§  47  TIME   OF    PAYMENT.  67 

payable  on  deraand.^^^  But  it  has  been  held  that,  where  an  in- 
strument has  been  transferred  after  dislionor,  the  original  de- 
mand on  the  maker  and  notice  to  the  indorser  inure  to  the  benefit 
of  subsequent  holders,  and  they  need  not  make  demand  or  give 
notice  anew.^*^ 


Payable  at  a  Fixed  or  Determinable  Future  Time. 

§  45.    An  instrument  is  payable  at  a  determinable  future  time, 
which  is  expressed  to  be  payable : 

1.  At  a  fixed  period  after  date  or  sight;  or 

2.  On  or  before  a  fixed  or  determinable  future  time  speci- 

fied therein;  or 

3.  On  or  at  a  fixed  period  after  the  occurrence  of  a  speci- 

fied event,  which  is  certain  to  happen  though  the 
time  of  happening  be  uncertain. 

§  46.  An  instrument  payable  upon  a  contingency  is  not  nego- 
tiable, and  the  happening  of  the  event  does  not  cure  the 
defect. 

§  47.  But  an  instrument  payable  at  a  fixed  period  after  date  or 
sight  is  negotiable,  though  it  be  payable  before  then  on  a 
contingency. 

Instruments  payable  at  fixed  period  after  date  or  sight. 

An  instrument  is  payable  at  a  fixed  or  determinable  future 
time  which  is  expressed  to  be  payable  at  a  fixed  period  after  date 
or  sight.^5°    I'nder  the  law  merchant,  an  instrument  payable  ''six 

N.  E.  75;  Smith  v.  Caro,  9  Or.  278;  Tyler  v.  Young,  30  Pa.  143;  Ro'ison 
V.  Carroll.  90  Tenn.  90,  16  S.  W.  66,  12  L.  R.  A.  724;  Corwith  v.  Mor- 
rison, 1  Pin.  (Wis.)  498. 

]*8  Bishop  V.  Dexter,  2  Conn.  419;  Coleman  v.  Dunlap,  18  S.  C.  591; 
Moore  V.  Alexander,  63  A  pp.  Div.  100,  71  N.  Y.  Supp.  420. 

149  French  v.  Jarvis,  29  Conn.  347. 

150  ]S[eg.  Inst.  T.aws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  T.a., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  II.,  N.  J.,  N.  M.,  N.  C.  N.  D.,  Ok'l..  Or., 
Pa.,  Tenn.,   Utah,  Va..  Wash.,  W.  Va.,  Wyo.   (§  4);   Ariz.   (§  3307^;   111. 


68  ESSENTIALS    OF   NEGOTIABILITY.  §47 
after  date"  is  not  so  uncertain  as  to  be  void/^^  nor  is 


one  payable  **  twenty-four  after  date,"^^^  and,  under  the  nego- 
tiable instruments  law,  such  instruments  would  be  negotiable  if 
there  is  anything  on  them  from  which  the  period  of  time  intended 
can  be  ascertained.  In  accordance  with  this  it  has  been  held, 
under  the  act,  that  words  ''Due  Oct.  1"  at  the  end  of  a  bill  should 
be  construed  to  mean  payable  October  1st,  and  the  bill  be  deemed 
payable  at  a  fixed  time  and  negotiable.^^^  A  bill  payable  five 
days  "after  sight"  is  payable  five  days  after  acceptance,  and  not 
five  days  after  presentment.^^* 

Provision  for  extension  of  time  of  payment. 

There  is  a  conflict  among  the  authorities  as  to  whether,  under 
the  negotiable  instruments  act,  a  provision  whereby  all  parties 
waive  notice  of  an  extension  of  time  for  payment  renders  the 
note  non-negotiable  or  not.^^^  In  the  North  Dakota  case  cited  the 
note  provided  that  "the  makers  and  indorsers  herein  *  *  * 
consent  that  the  time  of  payment  may  be  extended  without  no- 
tice." The  note  was,  by  its  terms,  payable  on  or  before  the  first 
of  October,  1903.  The  court  says:  "To  us  it  is  clear  that  it 
has  the  same  effect  as  though  the  note  read  'on  the  1st  day  of 
October,   1903,  or  thereafter  on  demand,'  in  which  case   there 

(§  4):  Kan.  (§  11);  Md.  (§  23);  Mich.  (§  6);  Neb.  (§  4);  N.  Y.  (§  23); 
Ohio  (§  3171  c);  R.  I.  (§  12);  Wis.  (§  1675-4). 

151  Nichols  V.  Frothingham,  45   Me.  220,  71   Am.   Dec.   539.     See,   also, 

Weems  v.  Parker,  60  111.  App.  167,  where  it  was  held  that  "ninety  

after  date"  means  90  days  after  date. 

152  Conner  v.  Routh,  7  How.  (Miss.)  176,  40  Am.  Dec.  59. 
i53Torpey  v.  Tebo,  184  Mass.  307,  68  N.  E.  223 

154  Mitchell  V.  Degrand,  1  Mason,  176,  Fed.  Cas.  No.  9,661. 

155  That  it  does.  Union  Stock  Yard  Nat.  Bank  v.  Bolan,  14  Idaho,  87. 
93  Pac.  508,  125  Am.  St.  Rep.  146. 

That  it  does  not.  Note  being  payable  on  or  before  a  day  named.  First 
Nat.  Bank  v.  Buttery  (N.  D.)  116  N.  W,  341.  The  note  contammg  an  un- 
qualified agreement  on  the  part  of  the  maker  to  pay  on  a  certain  date, 
its  negotiability  is  not  destroyed  bj'  a  provision  providing  that  sureties 
consent  to  an  extension  of  the  time  of  payment  without  notice  Farmer, 
Thompson  &  Helseli  v.  Bank  of  Graettinger,  130  Iowa,  469,  107  N.  W. 
170  (not  under  negotiable  instruments  law). 


§47  TIME  OF  PAYMENT.  69 

would  be  no  question  of  its  negotiability.  *  *  *  Tliis  pro- 
vision seems  to  us  to  have  been  inserted  to  protect  the  holder 
against  any  release  of  indorsers  or  others,  by  an  extension  with- 
out their  assent,  and  the  word  'makers'  is  evidently  included  to 
prevent  any  misunderstanding  or  misconstruction  of  the  contract 
or  failure  to  distinguish  between  makers,  indorsers,  sureties,  and 
any  other  parties  who  might  be  or  become  liable  thereon  under 
certain  contingencies  as  makers.  This  phrase  does  not  express 
an  agreement  to  extend  time,  but  leaves  the  matter  of  extension 
optional  with  the  holder,  and  not  obligatory  upon  him,  and  the 
note  on  its  face  fixes  the  time  when  it  becomes  due.  In  this 
respect  it  must  be  distinguished  from  a  provision  to  the  effect 
that  the  time  of  payment  shall  be  extended  indefinitely,  in  which 
case  the  uncertainty  of  the  time  renders  the  instrument  non- 
negotiable. "  ^^^ 

Instruments  payable  "on  or  before"  a  fixed  or  determinable  fu- 
ture time  specified  therein. 

Paper  payable  "on  or  before"  a  fixed  date  is  payable  on  such 
date,  and  is  negotiable  under  both  the  law  merchant  ^^"^  and  the 
negotiable  instruments  laws.^^^  The  same  rule  applies  to  paper 
payable  "on  or  by  the  first  of  March, ' '  ^^9  or  simply  " by  a  certain 
date."  160 

Instruments  payable  on  or  at  a  fixed  period  after  event  certain. 

Instruments  payable  on  or  at  a  fixed  period  after  the  occurrence 
of  a  specified  event,  which  is  certain  to  happen,  though  the  time 

156  First  Nat.  Bank  v.  Buttery  (N.  D.)  116  N.  W.  341.  For  case  deal- 
ing with  "indefinite  extension,"  see  Woodbury  v.  Roberts,  59  Iowa,  348, 
13  N.  W.  312,  44  Am.  Rep.  685. 

157  Mattison  v.  Marks,  31  Mich.  421,  18  Am.  Rep.  197;  First  Nat.  Bank 
of  Springfield  v.  Skeen,  101  Mo.  683,  14  S.  W.  732,  11  L.  R.  A.  748;  Jordan 
V.  Tate,  19  Ohio  St.  586. 

15S  Subdivision  2,  same  sections  of  negotiable  instruments  laws  as  last 
above  cited.    See  Lowell  Trust  Co.  v.  Pratt,  183  Mass.  379,  67  N.  E.  363. 

159  See  Massie  v.  Belford,  68  111.  290. 

160  Preston  v.  Dunham,  52  Ala.  217. 


70  ESSENTIALS    OF   NEGOTIABILITY.  §47 

of  happening  be  uncertain,  are  sufficiently  certain  as  to  time.^^^ 
The  death  of  the  maker  of  the  note  being  certain  to  take  place, 
a  note  promising  to  pay  a  certain  sum,  "to  be  allowed  at  my  de- 
cease, "^^2  ig  negotiable,  and  so  is  one  payable  "60  days  after  my 
death; "1^2  ^Iso  one  payable  "on  demand  after  my  decease."  ^^* 
But  instruments  payable  when  the  person  shall  become  of  age,^^^  or 
be  elected  to  a  certain  office,^^^  or  when  a  certain  estate  shall  be 
settled  up,^^''  are  not  negotiable. 

Instruments  payable  on  contingency. 

Instruments  payable  on  a  contingency  are  not  certain,  and 
hence  are  not  negotiable,  and  the  happening  of  the  contingency 
does  not  cure  the  defect. ^^^  Instruments  of  this  kind  are  illus- 
trated by  the  last  three  illustrations  used  in  the  preceding  sec- 
tion, and  the  happening  of  the  contingency  in  any  of  those  cases, 
i.  e.,  the  becoming  of  age,  or  the  election  to  the  office,  or  the  set- 
tling up  of  the  estate,  would  not  cure  the  defect,  or  render  the 
instrument  negotiable  from  that  time.^^^ 

Instruments  payable  at  fixed  period  after  date  or  sight,  though 
payable  before  then  on  a  contingency. 

It  has  been  a  recognized  rule  that  instruments  payable  at  a 
fixed  period  after  date  or  sight,  though  payable  before  then  on 

161  Subdivision  3,  same  sections  of  negotiable  instruments  laws  as  last 
above  cited. 

162  Martin  v.  Stone,  67  N.  H.  367,  29  Atl.  845. 

163  Crider  v.  Shelby,  95  Fed.  212. 

16-t  Bristol  V.  Warner,  19  Conn.  7.  See,  also,  Carnwright  v.  Gray,  127  N. 
Y.  92,  27  N.  E.  835,  24  Am.  St.  Rep.  424,  12  L.  R.  A.  845;  Hegeman  v. 
Moon,  131  N.  Y.  462,  30  N.  E.  487. 

165  Kelley  v.  Hemniingway,  13  III.  604,  56  Am.  Dec.  474,  distinguishing 
Goss  V.  Nelson,  1  Burrows,  227. 

166  Cooper  V.  Brewster,  1  Minn.  (Gil.  73)  94. 

167  Husband  v.  Epling,  81  111.  172,  25  Am.  Rep.  273. 

168  Same  subdivisions  and  sections  of  negotiable  instruments  laws  as 
last  above  cited. 

169  Kelley  v.  Hemm.ingway,  13  111.  604,  56  Am.  Dec.  474.  See,  also,  Chi- 
cago Railway  Equipment  Co.  v.  Merchants'  Bank,  136  U.  S.  268,  34  Law. 
Ed.  349. 


§49  WORDS  OF  NEGOTIABILITY.  71 

a  contingency,  are  sufficiently  certain  to  be  negotiable.  Thus,  one 
payable  on  a  fixed  day,  "or  when  he  completes"  a  certain  build- 
ing, is  negotiable^'**  Also  an  instrument  payable  at  a  fixed  time 
after  date,  "or  before,  if  realized  out  of  the  sale"  of  certain 
property.^''^^  The  Wisconsin  negotiable  instruments  law  specially 
provides  for  instruments  of  this  class  and  makes  them  negotia- 
ble.^''^ No  express  provision  for  them  is  made  in  the  negotiable 
instruments  law  as  adopted  in  the  other  states. 

Necessity  of  Words  of  Negotiability. 

§  48.  An  instrument  to  be  negotiable  must  be  payable  to  "or- 
der" or  "bearer"  or  contain  words  of  like  import.    ,r^^  . 

§  49.  Qualification. — The  indicia  of  neg-otiability  may  be  added 
by  indorsement  so  as  to  render  the  instrument  negotiable 
from  that  time. 

It  is  a  fixed  rule  of  the  law  merchant  that  an  instrument,  to  be 
negotiable,  must  be  payable  to  order  or  to  bearer,  or  contain 
words  of  like  iraport,^"^  and  the  negotiable  instruments  laws  have 
adopted  the  rule.^'''*   Under  this  rule  it  is  clear  that  an  instrument 

170  Stevens  v.  Blunt,  7  Mass.  240.  See,  also,  Goodloe  v.  Taylor,  10  N. 
C.  (3  Hawks)  458. 

171  Walker  v.  Woollen,  64  Ind.  164;  Noll  v.  Smith,  64  Ind.  511,  31  Am. 
Rep.  131;  Charlton  v.  Reed,  61  Iowa,  166,  16  N.  W.  64,  47  Am.  Rep.  808. 
Bitt  see  Stultz  v.  Silva,  119  Mass.  137,  where  an  instrument  promising  to 
pay  a  certain  sum  in  a  year  and  a  half,  "or  sooner,  at  the  option  of  the 
mortgagor,"  was  held  to  be  non-negotiable. 

172  Negotiable  Inst.  Law,  §  1675-4,  subd.  4.  Mortgage  note  for  a  speci- 
fied sum  and  payable  on  a  certain  future  date  is  negotiable,  though  it 
provides  that  on  default  in  interest  or  failure  to  comply  with  any  of  the 
conditions  of  the  mortgage  then  the  entire  principal  should,  at  the  option 
of  the  mortgagee,  become  due  and  payable.  Thorp  v.  Windeman,  123 
Wis.  149,  101  N.  W.  417,  107  Am.  St.  Rep.  1053. 

173  Backus  V.  Danforth,  10  Conn.  297;  Yingling  v.  Kohlhass,  18  Md. 
148;  Maule  v.  Crawford,  14  Hun  (N.  Y.)  193;  Albright  v.  Griffm,  78  Ind. 
182;  Carruth  v.  Walker,  8  Wis.  103. 

17*  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,   Mo.,  Mont.,  Nev.,  N.   H.,  N.  J.,  N.   M.,  N.   C,  N.   D.,  Okl.,  Or., 


72  ESSENTIALS    OF   NEGOTIABILITY.  §49 

payable  to  a  named  payee  "only"  is  not  negotiable/'''^  nor  is  one 
payable  to  named  payees  ' '  or  their  collector. ' '  ^'^  A  bill  of  ex- 
change not  containing  the  words  "order  or  bearer,"  though  not 
negotiable,  is  valid.^^^ 

Negotiable  words  may  be  supplied  by  indorsement. 

"Where  an  instrument  is  non-negotiable  for  lack  of  the  words 
"order"  or  "bearer,"  an  indorsement  supplying  the  words  makes 
the  instrument  negotiable  from  that  time.^^^ 


"What  Instruments  Payable  To  Order. 

§  50.  The  instrument  is  payable  to  order  when  it  is  drawn  pay- 
able to  the  order  of  a  specified  person  or  to  him  or  his 
order.    It  may  be  drawn  to  the  order  of ; 

1     A  payee  who  is  not  maker,  drawer  or  drawee;  or 

2.    The  drawer  or  maker; 

But  a  note  drawn  to  the  maker's  own  order  is  not 
negotiable  until  indorsed  by  him; 

Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§§  1,  184);  Ariz.  (§§  3304, 
3487);  111.  (§§  1,  183);  Kan.  (§§  8,  191);  Md.  (§§  20,  203);  Mich  (§§  3, 
186);  Neb.  (§§  1,  173);  N.  Y  (§§  20,  320);  Ohio  (§§  3171,  3177  u);  R.  I. 
(§§  9,  192);  Wis.  (§§  1675-1,  1684). 

Gilley  v.  Harrell,  118  Tenn.  115,  101  S,  W.  424;  Westberg  v.  Chicago 
Lumber  &  Coal  Co.,  117  Wis.  589,  94  N.  W.  572.  This  changes  the  rule 
in  Colorado  (see  Rev.  St.  c.  1084,  and  Tliackaray  v.  Hanson,  1  Colo.  365), 
and  in  North  Carolina  (see  Code,  §  41).  In  North  Carolina  ri'he  section 
reads  "Must  be  payable  to  a  specified  person  or  bearer''  The  'Aords 
"specified  person"  would  seem  to  add  nothing  to  the  section  because  m- 
cluded  in  Negotiable  Inst.  Act,  §  1.     See  post,  §  50. 

Bonds  payable  to  bearer  held  negotiable  instruments.  Parsons  v.  Ulica 
Cement  Mfg.  Co.,  80  Conn    58,  66  Atl.  1024 

175  Hackney  v.  Jones,  22  Tenn.  (3  Humph.)  612.  See,  also,  Backus  v. 
Danforth,  10  Conn.  297 

176  Noxon  V.  Smith,  127  Mass.  485. 

177  Mehlberg  v.  Tisher,  24  Wis.  607. 

178  Carruth  v.  Walker,  8  Wis.  103;  Brenzer  v.  Wightman,  7  Watts  &  S. 
(Pa.)  264;  Bay  v.  Freazer,  1  Bay  (S.  C.)  66. 


§50        INSTRUMENTS  PAYABLE  TO  ORDER.         73 

3.  The  drawee;  or 

4.  Two  or  more  payees  jointly;  or 

5.  One  or  some  of  several  payees ;  or 

6.  The  holcier  of  an  cfFice  for  the  time  being. 

Instruments  payable  to  the  order  of  payee  who  is  not  maker  or 
drawer. 

An  instrument  is  paj'able  to  order  when  it  is  drawn  payable  to 
the  order  of  a  specified  person,  or  to  him  or  his  order.^^^  It  may  be 
drawn  payable  to  the  order  of  a  payee  who  is  not  the  maker  or 
drawer  or  drawee.^^° 

Instruments  payable  to  the  order  of  maker  or  drawer. 

The  negotiable  instruments  laws  provide  that  an  instrument 
payable  to  the  order  of  the  drawer  or  maker  is  payable  to  order.^^^ 
This  rule,  when  taken  with  the  rule  that  a  note  payable  to  the 
order  of  the  maker  is  not  complete  until  indorsed  by  him,^^'^  chan- 
ges the  law,  for  heretofore  instruments  payable  to  the  order  of 

179  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Old.,  Or., 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  8);  Ariz.  (§  3311);  111. 
(§  8);  Kan.  (§  15);  Md.  (§  27);  Mich.  (§  10);  Neb.  (§  8);  N.  Y.  (§  27); 
Ohio  (§  3171  g);  R.  I.  (§  16);  Wis.  (§  1675-8). 

180  Subdivision  1,  same  sections  of  negotiable  instruments  laws  as  last 
above  cited. 

181  Subdivision  2,  same  sections  of  negotiable  instruments  laws  as  last 
above  cited. 

182  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or., 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va..  Wyo.  (§  184);  Ariz.  (§  3487);  111. 
(§  183);  Kan.  (§  191);  Md.  (§  203);  Mich.  (§  186);  Neb.  (§  183);  N.  Y. 
(§  320);  Ohio  (§  3177  v);  R.  I.  (§  192);  Wis.  (§  1684). 

A  note  payable  to  the  order  of  the  maker  is  not  valid  until  after  nego- 
tiation. Roach  V.  Sanborn  Land  Co.,  135  Wis.  354,  115  N.  W.  1102; 
Murphy  v.  Schooh,  135  111.  App.  550;  Sherman  v.  Goodwin  (Ariz.)  89 
Pac.  517. 


74  ESSENTIALS    OF    NEGOTIABILITY.  §50 

the  maker  were  payable  to  bearer  ^^^  ^nd  passed  by  delivery .^s* 
Under  the  negotiable  instruments  act,  delivery  by  the  payee,  as 
well  as  indorsement  by  him,  is  essential  to  the  valid  existence  of 
such  instrument.^^ 

Instruments  payable  to  the  order  of  drawee. 

Instruments  payable  to  the  order  of  the  drawee  are  now  ex- 
pressly made  payable  "to  order"  and  are  negotiable.^^^ 

Instruments  payable  to  the  order  of  two  or  more  payees  jointly. 

Instruments  payable  to  the  order  of  two  or  more  payees  jointly 
are  payable  to  order,^^^  provided  the  payees  are  all  named  or  oth- 
erwise indicated  with  reasonable  certainty .^^^ 


e 


183  Irving  Nat.  Bank  v.  Alley,  79  N.  Y.  536;  Bank  of  Winona  v.  Wofford, 
71  Miss.  711,  14  So.  262;  Main  v.  Hilton,  54  Cal.  110.  As  against  th 
maker,  such  instruments  are  by  statutes  in  the  following  states  made 
equivalent  to  instruments  payable  to  bearer:  Cal.'  (Civ.  Code,  §§  8101, 
8102);  Minn.  (Gen.  St.  1894,  §  2236). 

Statutes  of  like  import  in  the  following  states  are  repealed  by  the  Ne- 
gotiable Instruments  Laws:  Idaho  (Rev.  St.  §  3446);  Mich.  (How.  Am. 
St.  §  1580);  Mo.  (Rev.  St.  §  735);  Or.  (Ann.  Laws,  §§  3188,  3191);  Nev. 
(Gen.  St.  §  4885);  N.  Y.  (Rev.  St.  pt.  2,  c.  4,  tit.  2,  §  5) ;  N.  D.  (Rev.  Code, 
§§  4864,  4865);  Wis.  (Sanb.  &  B.  Ann.  St.  §  1579);  Wyo.  (Laiws  1888,  c. 
70,  art.  2,  §  13). 

In  some  states  the  rule  as  to  the  necessity  of  the  maker's  indorsement 
on  an  instrument  payable  to  his  order  is  the  same  as  that  established  by 
the  negotiable  instruments  laws.  Lea  v.  Branch  Bank  at  Mobile,  8  Port. 
(Ala.)  119;  Lapeyre  v.  Weeks,  28  La.  Ann.  664;  Heywood  v.  Wingate, 
14  N.  H.  7Z. 

1S4  Bank  of  Lassen  County  v.  Sherrer,  108  Cal.  513,  41  Pac.  415;  O'Conor 
V.  Clarke  (Cal.)  44  Pac.  482;  Irving  Nat.  Bank  v.  Alley,  79  N.  Y.  536; 
Jones  V.  Shapera,  6  C.  C.  A.  423,  57  Fed.  457;  Thompson  v.  Perrine,  106 
U.  S.  589,  27  Law.  Ed.  298. 

i85Stouffer  V.  Curtis,  198  Mass.  560,  85  N.  E.  180;  Sherman  v.  Goodwin 
(Ariz.)  89  Pac.  517. 

186  Cited  in  note  179,  ante. 

187  Subdivision  4,  same  sections  of  negotiable  instruments  laws  as  last 
above  cited.  An  instrument  payable  to  "steamboat  J  and  owners"  has 
been  held  negotiable.  Moore  v.  Anderson,  8  Ind.  18.  See,  also.  Wood 
V.  Wood,  16  N.  J.  Law,  428. 

188  A  note  payable  to  a  named  payee  "et  al."  is  not  negotiable.'    Gordon 


§  50  INSTRUMENTS    PAYABLE   TO    ORDER.  75 

Instruments  payable  to  the  order  of  one  or  some  of  several  payees. 

Instruments  payable  to  the  order  of  one  or  some  of  several 
payees  have  heretofore  been  considered  non-negotiable,  e.  g.,  a 
note  payable  to  "A.  or  B.,"^^^  or  one  payable  to  named  payees 
"or  their  collector ;"  i^°  but  now,  under  the  negotiable  instru- 
ments laws,  such  instruments  are  seemingly  made  negotiable.^^^ 

Instruments  payable  to  the  order  of  the  holder  of  an  ofl&ce. 

An  instrument  payable  to  the  order  of  the  holder  of  an  office 
for  the  time  being  is  now  payable  "to  order"  and  is  negotiable.^^ 
An  instrument  expressly  payable  to  a  trustee  has  hitherto  been 
deemed  non-negotiable.  Thus  it  has  been  held  that  a  note  pay- 
able to  a  trustee  or  his  order,  and  afterwards  sold  by  him  to  a 
bank,  was  not  "commercial  paper,"  and  that,  as  between  the  bank 
and  the  cestui  que  trust,  the  former  was  charged  with  notice  that 
the  transfer  was  in  fraud  of  the  trust.^^^  In  New  York,  however, 
an  instrument  payable  to  the  trustees  of  a  corporation,  "or  their 
successors  in  office,  or  order,"  is  negotiable.^''^  Notes  payable  to 
sheriffs,  which  show  that  they  were  given  for  the  price  of  prop- 
erty sold  at  a  judicial  sale,  carry  on  their  face  notice  that  such 

V.  Anderson,  83  Iowa,  224,  49  N.  W.  86,  32  Am.  St.  Rep.  302,  12  L.  R.  A. 
483. 

189  Carpenter  v.  Farnsworth,  106  Mass.  561,  8  Am.  Rep.  360;  Musselman 
V.  Oakes,  19  111.  81,  68  Am.  Dec.  583. 

190  Noxon  V.  Smith,  127  Mass.  485. 

191  Subdivision  5,  same  sections  of  negotiable  instruments  laws  as  last 
above  cited.  See  ante,  §  8,  and  post,  §  54,  which  deal  with  the  provision 
which  provides  that  a  bill  of  exchange  may  be  addressed  to  "two  or  more 
drawees  jointly  *  *  *  but  not  to  two  or  more  drawees  in  the  alter- 
native or  in  succession." 

192  Subdivision  6,  same  sections  of  negotiable  instruments  laws  as  last 
above  cited. 

193  Third  Nat.  Bank  v.  Lange,  51  Md.  138,  34  Am.  Rep.  304.  See,  also, 
MrMasters  v.  Dunbar,  2  La.  Ann.  577,  in  which  it  was  held,  following 
Nicholson  v.  Chapman,  1  La.  Ann.  223,  that  a  note  payable  on  its  face 
to  the  order  of  a  tutor  of  minors  carries  notice  that  the  obligation  be- 
longs to  the  mipors. 

19*  Davis  V.  Garr.  2  Seld.  (N.  Y.)  124. 


76  ESSENTIALS    OF    NEGOTIABILITY.  §51 

officers  took  in  their  official  capacity /^^  but  the  mere  word  "Sher- 
iff" or  the  designation  "Shff."'  does  not  show  that  the  money  was 
payable  to  the  sheriff  in  such  capacity .1^''  The  rule  as  here  stated 
accords  with  that  of  the  law  merchant.  In  England,  however,  the 
rule  has  been  changed  so  that  "a  bill  is  payable  to  order  which 
is  expressed  to  be  so  payable,  or  which  is  expresed  to  be  payable 
to  a  particular  person,  and  does  not  contain  words  prohibiting 
transfer  or  indicating  an  intention  that  it  should  not  be  trans- 
ferable."  i'^7 


"What  Instruments  Payable  To  Bearer. 

§  51.    The  instrument  is  payable  to  bearer: 

1.  When  it  is  expressed  to  be  so  payable;  or 

2.  Where  it  is  payable  to  a  person  named  therein  or  bear- 

er; or 

3.  When  it  is  payable  to  the  order  of  a  fictitious  or  non- 

existing  person,  and  such  fact  was  knovTn  to  the  per- 
son making  it  so  payable ;  or 

4.  When  the  name  of  the  payee  does  not  purport  to  be 

the  name  of  any  person;  or 
J  5.    When  the  only  or  last  indorsement  is  an  indorsement 

in  blank. 

Instruments  expressly  payable  to  bearer. 

It  seems  axiomatic  to  state  that  instruments  expressly  made 
payable  to  bearer,  or  to  a  person  named  therflin,  "or  bearer.  '  are 
payable  to  bearer,  yet  the  negotiable  instruments  laws,  to  he  ex- 
plicit, enumerate  instruments  so  payable  as  bearer  paper.^°^ 

i95Ranney  v.  Brooks,  20  Mo.  105;  Renshaw  v.  Wills,  38  Mo.  201, 

196  Powell  V.  Morrison,  35  Mo.  244;  Fletcher  v.  Schaumburg,  41  Mo.  50 

197  Bills  of  Exchange  Act. 

198  Ne-g.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky,,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or., 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  9);  Ariz.  (§  3312):  111. 
(§  9);  Kan.  (§  16);  Md.  (§  28);  Mich.  (§  11);  Neb.  (§  9);  N.  Y.  (§  28); 
Ohio  r§  3171  h);  R.  I.  (§  17);  Wis.  (§  1675-9). 


§  51  INSTRUMENTS  PAYABLE  TO  BEARER.  77 

Instruments  payable  to  fictitious  or  nonexistent  persons. 

Bills  or  notes  made  payable  to  the  order  of  a  fictitious  or  non- 
existent person,  if  such  fact  was  known  to  the  person  making  it 
so  payable,  are  payable  to  bearer.^^  Notes  payable  to  fictitious 
persons  have  generally  been  treated  as  payable  to  bearer,-''°  and 
the  negotiable  instruments  laws,  by  using  the  word  "instru- 
ment," include  bills  of  exchange.  Hitherto  a  bill  payable  to  the 
order  of  a  fictitious  person  could  not  be  treated  as  payable  to 
bearer  unless  the  fact  that  the  paj'ee  was  fictitious  was  known  to 
the  acceptor  as  well  as  to  the  drawer.-*'^  The  doctrine  that  a 
check  or  bill  made  payable  to  a  fictitious  person  is  payable  to 
bearer,  and  negotiable  without  indorsement,  if  the  fictitious  char- 
acter of  the  payee  was  known  to  the  parties,  originated  in  Eng- 
land; and  in  each  of  the  cases  holding  the  doctrine  the  decision 
was  based  on  the  fact  that  the  acceptor  knew,  at  the  time  of  his 
acceptance,  that  the  instrument  was  payable  to  a  fictitious  per- 
gQj2_202  ^^  common  law  the  rule  was  uniformly  based  upon  the 
law  of  estoppel  and  applied  only  against  the  parties  who  at  the 
time  they  became  liable  on  the  bill  or  note  were  cognizant  of  the 
fictitious  character  of  the  supposed  payee.^°^  And  this  is  prac- 
tically the  rule  adopted  by  the  negotiable  instruments  law  of  this 


A  note  payable  to  a  certain  person,  or  "holder,"  etc.,  is  payable  to 
bearer.  Putnam  v.  Crymes,  1  McMul.  (S.  C.)  9,  36  Am.  Dec.  250.  Cer- 
tificates of  deposit  payable  on  return  of  certificate  properly  indorsed. 
Kavanagh  v.  Bank  of  America,  239  111.  404,  88  N.  E.  171. 

199  Subdivision  3,  same  sections  of  negotiable  instruments  laws  as  last 
above  cited. 

200  Same  subdivisions  and  sections  of  negotiable  instruments  laws  as 
las.t  above  cited. 

Lane  v.  Kreckle,  22  Iowa,  399;  Anderson  v.  Dundee  State  Bank,  20  N. 
Y.  Supp.  511;  Forbes  v.  Espy,  21  Ohio  St.  474.  And  see  Earns  worth  v. 
Drake,  11  Ind.  lOL 

201  Hunter  v.  Blodgett,  2  Yeates  (Pa.)  480.  But  see  1  Daniel,  Nego- 
tiable Inst.,  p.  118. 

202Tatlock  V.  Harris,  3  Term.  R.  174,  180;  Vere  v.  Lewis,  3  Term.  R. 
182;  Minet  v.  Gibson,  3  Term.  R.  481;  Gibson  v.  Minet,  1  H.  Bl.  569;  Gib- 
son V.  Hunter,  2  H.  Bl.  187. 

203Vagliona  Bros.  v.  Bank  of  England,  22,  Q.  B.  Div.  260. 


78  ESSENTIALS   OF   NEGOTIABTLTTY.  §  51 

country .20*  If  the  drawer  or  maker  of  an  instrument  does  not 
know  that  the  payee  is  a  fictitious  or  nonexistent  person,  and 
does  not  intend  to  make  the  paper  payable  to  such  person,  paper 
payable  to  the  order  of  such  person  cannot  be  treated  as  payable 
to  bearer,  for  the  intention  of  the  maker  or  drawer  is  the  test,205 

204Shipman  v.  Bank  of  State  of  New  York,  126  N.  Y.  318,  27  N.  E.  371, 
22  Am.  St.  Rep.  821,  12  L.  R.  A.  791;  Armstrong  v.  Pomeroy  Nat.  Bank, 
46  Ohio  St.  512,  22  N.  E.  866,  15  Am.  St.  Rep.  655,  6  L.  R.  A.  625;  Boles 
V.  Harding,  201  Mass.  103,  87  N.  E.  481;  Harmon  v.  Old  Detroit  Nat. 
Bank,  153  Mich.  1\  15  Det.  Leg.  N.  376,  116  N.  W.  617,  126  Am.  St.  Rep. 
467,  17  L.  R.  A.  (N.  S.)  514;  Chism  v.  First  Nat.  Bank,  96  Tenn.  641,  36 
S.  W.  387,  54  Am.  St.  Rep.  863,  32  L.  R.  A.  778;  Murphy  v.  Metropolitan 
Nat.  Bank,  191  Mass.  159,  11  N.  E.  693,  114  Am.  St.  Rep.  595;  Seaboard 
Nat.  Bank  v.  Bank  of  America,  193  N.  Y.  26,  85  N.  E.  829,  afg.  51  Misc. 
103,  100  N.  Y.  Supp.  740,  and  118  App.  Div.  907,  103  N.  Y.  Supp.  1141; 
Phillip  V.  Mercantile  Nat.  Bank,  140  N.  Y.  556,  35  N.  E.  982,  23  L.  R.  A. 
584,  37  Am.  St.  Rep.  596;  Snyder  v.  Corn  Exch.  Nat.  Bank,  221  Pa.  599, 
70  Atl.  876. 

205Shipman  v.  Bank  of  the  State  of  New  York,  126  N.  Y.  318,  27  N.  E. 
371,  12  L.  R.  A.  791,  22  Am.  St.  Rep.  821;  Armstrong  v.  Pomeroy  Xat. 
Bank,  46  Ohio  St.  512,  22  N.  E.  866,  6  L.  R.  A.  625,  15  Am.  St.  Rep.  655; 
Boles'  V.  Harding,  201  Mass.  103,  87  N.  E.  481;  Harmon  v.  Old  Detroit 
Nat.  Bank,  153  Mich.  73,  116  N.  W.  617,  126  Am.  St.  Rep.  467,  17  L.  R.  A. 
(N.  S.)  514;  Chism  v.  First  Nat.  Bank,  96  Tenn.  641,  36  S.  W.  387,  32  L. 
R.  A.  778,  54  Am.  St.  Rep.  863;  Murphy  v.  Metropolitan  Nat.  Bank,  191 
Mass.  159,  11  N.  E.  693,  114  Am.  St.  Rep.  595;  Seaboard  Nat.  Bank  v. 
Bank  of  America,  193  N.  Y.  26,  85  N.  E.  829,  afg.  51  Misc.  103,  100  N. 
Y.  Supp.  740,  and  118  App.  Div.  907,  103  N.  Y.  Supp.  1141.  Applying  the 
test  of  intention  of  the  maker,  it  has  also  been  held  that  the  paper  was 
not  payable  to  bearer  where  a  member  of  a  firm  signed  a  large  number  of 
checks,  relying  on  the  false  statements  of  an  employe,  the  names  of 
the  payees  being  in  some  instances  fictitious  and  in  others  the  names 
of  existing  persons  having  no  relation  to  the  paper.  Shipman  v.  Bank 
of  State  of  New  York,  126  N.  Y.  318,  27  N.  E.  371,  12  L.  R.  A.  791,  22  Am. 
St.  Rep.  821.  Thus,  where  plaintiff  was  induced  by  fraud  to  purchase  a 
note  by  the  pretended  agent  of  a  fictitious  person,  and  gave  to  such  agent 
therefor  a  check  payable  to  such  fictitious  person,  and  the  agent  indorsed 
the  check  with  the  name  of  the  fictitious  payee  and  his  own  name,  and 
it  was  paid  to  him  by  the  bank  on  which  it  was  drawn,  it  was  held  that 
plaintiff,  having  been  ignorant  of  the  fictitious  character  of  the  payee, 
and  not  having  been  negligent,  could  recover  the  amount  of  the  check 
from  the  bank.  Armstrong  v.  Pomeroy  Nat.  Bank,  46  Ohio  St.  512,  IS 
Am.  St.  Rep.  655. 


§51  INSTRUMENTS  PAYABLE  TO  BEARER.  79 

and  this  intention  must  necessarily  arise  from  knowledge  and  exist 
as  an  affirmative  fact  in  the  mind  of  the  maker  at  the  time  of  de- 
livery of  the  paper.-'^^ 

The  English  bills  of  exchange  act  provides  that  "where  the 
payee  is  a  fictitious  or  nonexisting  person,  the  bill  may  be  treated 
as  payable  to  bearer.  "207  This  provision  is  not  to  be  regarded 
as  controlled  by  the  state  of  the  law  at  the  time  of  its  enact- 
ment,208  and  not  being  a  codification  of  such  law  is  deemed,  by 
its  provisions,  to  have  swept  away  estoppel,  and  with  it  the  con- 
trolling importance  of  knowledge  and  intention,  as  an  element  in 
determining  whether  a  payee  is  fictitious.-°^ 

The  term  "fictitious,"  as  construed  by  the  courts,  does  not  nec- 
essarily mean  that  the  name  of  the  payee  represents  a  nonexist- 
ing person,  but  rather  that  it  represents  a  person  whom  the 
maker  knows  has  no  interest  in  the  paper,  or,  in  other  words,  is 

^206  Drawer  of  draft.  Seaboard  Nat.  Bank  v.  Bank  of  America,  193  N. 
Y.  26,  85  N.  E.  829,  afg.  51  Misc.  103,  100  N.  Y.  Supp.  740,  and  118  App. 
Div.  987,  103  N.  Y.  Supp.  1141. 

207  Bills  of  Exchange  Act  1882,  45  and  46  Vict.  c.  61,  §  7,  subd.  3.      . 

208  Bank  of  England  v.  Vagliano  Bros.  [1891]  App.  Cas.  107,  rvg.  23 
Q.  B.  Div.  243. 

209  In  England,  since  the  Bills  of  Exchange  Act  of  1882  (St.  45  &  46 
Vict.  c.  61,  §  7,  subd.  3),  proof  of  knowledge  by  the  maker  who  issues 
the  instrument  that  the  payee  is  fictitious  or  nonexistent  is  not  required. 
A  lawful  holder  may  treat  the  instrument  as  payable  to  bearer,  when- 
ever it  appears  thaf  the  nam.e  of  the  payee  is  inserted  merely  as  a  pre- 
tense, without  any  intention  that  payment  should  be  made  in  conformity 
with  the  promise,  whether  the  name  be  that  of  an  existing  or  a  non- 
existing  person.  Bank  of  England  v.  Vagliano  Bros.  [1891]  App.  Cas. 
107,  153;  Glutton  v.  Attenborough  [1897]  App.  Cas.  90.  Plaintiffs'  clerk 
induced  them  by  fraud  to  draw  checks  in  favor  of  a  nonexistent  person 
for  pretended  services  by  such  person,  and  thereafter  forged  the  indorse- 
ment of  such  person  and  negotiated  the  checks  to  defendant,  a  bona  fide 
holder,  to  whom  they  were  paid  by  plaintiff.  It  was  held  that  the  payee 
was  a  "fictitious  and  nonexisting"  person,  within  the  meaning  of  the 
above  subdivision,  though  plaintiffs  supposed,  at  the  time  the  checks  were 
drawn,  that  he  was  a  real  person,  and  that,  the  paper  being  payable  to 
bearer,  plaintiff's  could  not  recover  against  defendant  in  an  action  for 
money  paid  under  a  mistake  of  fact.  Clutton  v.  Attenborough  [1895]  2 
Q.  B.  Div.  306,  afd.  Id.  707. 


80  ESSENTIALS    OF    NEGOTIABILITY.  §  51 

fictitious  so  far  as  the  paper  is  concerned.^^"  Thus,  where  a  clerk 
of  a  firm  of  bankers  forged  a  large  number  of  bills  of  exchange 
purporting  to  be  drawn  on  the  firm  of  bankers  by  one  of  its  for- 
eign correspondents,  and  payable  to  another  well  known  firm,  and 
the  bankers  accepted  them,  they  were  held  within  the  statute  and 
payable  to  bearer.^^^  Also  the  same  rule  was  applied  where  one 
forged  an  administrator's  name  to  checks  payable  to  beneficiaries 
and  calling  for  amounts  larger  than  the  latter  were  entitled  to.212 
The  rule  adopted  by  the  American  negotiable  instruments  act 
might  appear  inconsiyteht  with  the  provisions  which  declare  the 
making  or  drawing  of  an  instrument  to  constitute  an  admission 
of  the  existence  of  the  payee  and  his  then  capacity  to  indorse, 
were  it  not  that  this  admi::;sion  apparently  goes  merely  to  the  ex- 
istence and  capacity  of  the  payee  and  does  not  diispense  with 
proof  of  actual  indorsement. 


Instruments  in  which  payee  is  not  a  "person." 

When  the  name  of  the  payee  does  not  purport  to  be  the  name 
of  any  person,  as  in  case  of  instruments  drawn  payable  to  an  "  es- 
tate, '^^^  or  to  "expenses,"  or  to  "bills  payable, "^i*  or  to  "cash," 
the  paper  is  payable  to  bearer.^^s 


210  Bank  of  England  v.  Vagliano  Bros.  [1891]  App.  Cas.  107,  rvg.  23 
Q.  B.  Div.  243,  22  Q.  B.  Div.  103;  Shipman  v.  Bank  of  State  of  New  York, 
126  N.  Y.  318,  27  N.  E.  371,  12  L.  R.  A.  791,  22  Am.  St.  Rep.  821;  Trust  Co. 
of  America  v.  Hamilton  Bank,  127  App.  Div.  515,  112  N.  Y.  Supp.  84; 
Phillips  V.  Mercantile  Nat.  Bank,  140  N.  Y.  556,  35  N.  E.  982,  23  L.  R.  A. 
584,  37  Am.  St.  Rep.  596;  Snyder  v.  Corn  Exch.  Nat.  Bank,  221  Pa.  599,  70 
Atl.  876. 

211  Bank  of  England  v.  Vagliano  Bros.  [1891]  App.  Cas.  107,  rvg.  23 
Q.  B.  Div.  243,  22  Q.  B.  Div.  103. 

212  Trust  Co.  of  America  v.  Hamilton  Bank,  127  App.  Div.  515,  112  N. 
Y.  Supp.  84. 

213  Scott  V.  Parker,  5  N.  Y.  Supp.  753;  Lewinsohn  v.  Kent,  33  N.  Y. 
Supp.  826. 

2i4WilIets  v.  Phoenix  Bank,  9  N.  Y.  Super.  Ct.  (2  Duer)  121. 
215  Subdivision  4,  same  sections  of  negotiable  instruments  laws  as  last 
above  cited. 


§  52  CERTAINTY    AS    TO    PARTIES.  81 

Instruments  indorsed  in  blank. 

Another  class  of  instruments  payable  to  bearer  is  composed 
of  instruments  indorsed  in  blank.  This  is  true  in  case  the  only- 
indorsement  is  in  blank,  and  also  in  case  only  the  last  indorse- 
ment is  in  blank.^iG  If  the  maker  of  a  note  wrongfully  obtains 
possession  of  it  after  its  indorsement  in  blank  by  the  payee,  he 
becomes  the  bearer  within  the  meaning  of  the  act.^^^ 

Certainty  as  To  Parties. 

§  52.  Where  instrument  is  payable  to  order,  the  payee  must  be 
named  or  otherwise  indicated  therein  with  reasonable 
certainty. 

Where  the  instrument  is  payable  to  order,  the  payee  must  be 
named  or  otherwise  indicated  with  reasonable  certainty .^^^  This 
requirement  is  not  new.^^^     The  designation  is  sufficient  if  the 

216  Subdivision  5,  same  sections  of  negotiable  instruments  laws  as  last 
above  cited.  Notes  indorsed  in  blank  are  payable  to  bearer.  Massachu- 
setts Nat.  Bank  v.  Snow,  187  Mass.  159,  72  N.  E.  959;  Wedge  Mines  Co. 
V.  Denver  Nat.  Bank,  19  Colo.  App.  182,  73  Pac.  873.  A  note  payable  to 
the  order  of  the  maker  becomes  payable  to  bearer  on  indorsement  in 
blank  by  the  maker  and  may  be  transferred  by  delivery.  Roach  v.  San- 
born Land  Co.,  135  Wis.  354,  115  N.  W.  1102. 

See,  also,  Curtis  v.  Sprague,  51  Cal.  239;  Morris  v.  Preston,  93  111.  215; 
McDonald  v.  Bailey,  14  Me.  101;  Mitchell  v.  Hyde,  12  How.  Pr.  (N.  Y.) 
460;  Greneaux  v.  Wheeler,  6  Tex.  515;  French  v.  Barney,  23  N.  C.  (1 
Ired.  Law)  219. 

217  Massachusetts  Nat.  Bank  v.  Snow,  187  Mass.  159,  72  N.  E.  959. 

218  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or., 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  8);  Ariz.  (§  3311);  111. 
(§  8);  Kan.  (§  15);  Md.  (§  27);  Mich.  (§  10);  Neb.  (§  8);  N.  Y.  (§  27); 
Ohio  (§  3171  g);  R.  I.  (§  16);  Wis.  (§  1675-8). 

An  instrument  purporting  to  be  a  check  which  is  payable  "to  the  order 
of,  on  sight,"  no  payee  being  named,  and  no  space  being  left  for  a  name, 
is  not  a  check.  Mcintosh  v.  Lytle,  26  Minn.  336,  3  N.  W.  983,  37  Am. 
Rep.  410. 

219  Tittle  v.  Thomas,  30  Miss.  122,  64  Am.  Dec.  154;  Moody  v.  Threlkeld, 
13  Ga.  55;  Evertson  v.  Nat.  Bank  of  Newport,  66  N.  Y.  14,  23  Am.  Rep.  9. 

Opp.— Sel.— 6 


82  ESSENTIALS    OF    NEGOTIABILITY.  §  52 

payee,  though  not  named,  can  be  readily  ascertained  from  the  in- 
strument.220  "Where  a  note  is  made  payable  to  the  order  of  the 
person  who  shall  thereafter  indorse  it,22i  the  designation  is  suf- 
ficient, and  so  is  one  payable  to  ''the  heirs"  of  a  certain  person  ;222 
but  one  payable  to  the  "estate"  of  a  deceased  person  does  not 
sufficiently  designate  the  payee,-^  nor  does  one  payable  to  named 
payees  "et  al."22*  An  instrument  in  the  form,  "Good  for  one 
hundred  and  twenty-six  dollars  on  demand,"  is  not  negotiable 
because  no  payee  is  named,  but  "is  nothing  more  than  a  mem- 
orandum between  the  parties  to  it,  to  operate  as  a  promise  to 
pay  money,  as  a  receipt  for  money,  or  as  proof  of  a  sum  of  money 
to  be  accounted  for,  according  to  the  evidence  offered,  to  show 
the  intention  of  both  parties  when  it  is  made."  ^^ 

Same — Place  for  payee 's  name  blank. 

The  rule  that  the  payee  must  be  named  or  indicated  with 
reasonable  certainty  would  seem  to  do  away  with  the  doctrine 
that,  where  the  place  for  the  payee's  name  is  blank,  the  instru- 
ment is  payable  to  bearer  and  is  negotiable,^^^  especially  since 
this  kind  of  paper  is  not  enumerated  with  tbe  instruments  made 
payable  to  bearor.227  Under  the  English  Bills  of  Exchange  Act  1882 
(45  &  46  Vict.  c.  61,  §  7),  providing  that,  where  a  bill  is  not  pay- 

220  Culver  V.  Marks,  122  Ind.  554,  23  N.  E.  1068,  17  Am.  St.  Rep.  377, 
7  L.  R.  A.  489. 

221  United  States  v.  White,  2  Hill  (N.  Y.)  59,  37  Am.  Dec.  374.  See, 
also,  Rich  v.  Starbuck,  51  Ind.  87. 

222  Cox  V.  Belthoover,  11  Mo.  142,  47  Am.  Dec.  145.  See,  also,  Bacon  v. 
Fitch,  1  Root  (Conn.)  181. 

223  Lyon  V.  Marshall,  11  Barb.  (N.  Y.)  241;  Wayman  v.  Torreyson,  4 
Nev.  124,  holding  that  the  payee  must  be  in  esse  at  the  time  the  instru- 
ment takes  effect. 

224  Gordon  v.  Anderson,  83  Iowa,  224,  49  N.  W.  86,  32  Am.  St.  Rep.  302, 
12  L.  R.  A.  483. 

225  Brown  v.  Gilman,  13  Mass.  158. 

226Dinsmore  v.  Duncan,  57  N.  Y.  573,  15  Am.  Rep.  534;  Prewitt  v.  Chap- 
man, 6  Ala.  86. 

227  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or., 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.   (§  9);  Ariz.    (§  3312);   111. 


§53  CERTAINTY    AS    TO    PARTIES.  8.T 

able  to  bearer,  "the  payee  must  be  named,  or  otherwise  indicated 
therein  Avith  reasonable  certainty,"  when  construed  with  the 
provision  defining  a  bill  (section  3)  as  it  is  defined  in  the  nego- 
tiable instruments  laws,  and  the  provision  that  a  bill  may  be 
drawn  payable  to,  or  to  the  order  of,  the  drawer  (section  5),  an 

instrument  payable  to  " order,"  there  being  no 

"or"  before  "order,"  means  payable  to  "my  order"  that  is,  to 
the  order  of  the  drawer,  and,  after  indorsement  by  the  drawer, 
is  a  valid  bill  of  exchange,  though  the  blank  is  never  filled.^^ 

Same — Parol  evidence  of  mistake. 

If  there  was  a  mistake  in  the  name  of  the  payee,  or  the  instru- 
ment is  ambiguous  in  that  particular,  parol  evidence  is  admissible 
to  show  the  true  intent  of  the  parties.^^^  This  rule  applies  both 
where  the  mistake  is  in  the  spelling-^*^  and  where  the  instrument  is 
made  out  in  the  name  of  one  not  intended  as  payee.-^^ 

§  53.  Where  the  instrument  is  addressed  to  a  drawee,  he  must 
be  named  or  otherwise  indicated  with  reasonable  cer- 
tainty. 

Where  the  instrument  is  addressed  to  a  drawee,  he  must  be 
named  or  otherwise  indicated  therein  with  reasonable  certainty .'^^- 
This  rule  is  declaratory  of  the  law  merehant.^^^    Where  a  bill  does 

(§  9);  Kan.  (§  16);  Md.  (§  28);  Mich.  (§  11);  Neb.  (§  9);  N.  Y.  (§  28); 
Ohio  (§  31711);  R.  I.  (§  17);  Wis.  (§  1675-9). 
22S  Chamberlain  v.  Young  [1893]   2  Q.  B.  Div.  206. 

229  Medway  Cotton  Manufactory  v.  Adams,  10  Mass.  360;  Leaphardt  v. 
Sloan,  5  Blackf.  (Ind.)  278. 

230  Williams  v.  Baker,  67  111.  238;  Jacobs  v.  Benson,  39  Me.  132,  63  Am. 
Dec.  609. 

231  Hall  V.  Tufts,  35  Mass.  (18  Pick.)  455.  See,  also,  New  York  African 
Soc.  V.  Varick,  13  Johns.  (N.  Y.)  38. 

232  Neg.  Insf.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Old.,  Or., 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  1);  Ariz.  (§  3304);  111. 
(§  1);  Kan.  (§  8);  Md.  (§  20);  Mich.  (§  3);  Neb.  (§  1);  N.  Y.  (§  20); 
Ohio  (§  3171);  R.  I.  (§  9);  Wis.  (§  1675-1). 

233  See  Watrous   v.    Halbrook,  39  Tex.  572;  Prewitt  v.  Chapman,  6  Ala.  86. 


84  ESSENTIALS    OF   NEGOTIABILITY.  §54 

not  name  any  drawee,  it  has  been  held  that  it  will  be  considered 
as  drawn  by  the  drawer  on  himself.^'* 

§  54.  A  bill  may  be  addressed  to  two  or  more  drawees  jointly, 
whether  they  are  partners  or  not,  but  not  to  two  or  more 
drawees  in  the  alternative  or  in  succession. 

A  bill  of  exchange  "may  be  addressed  to  two  or  more  drawees 
jointly,  whether  they  are  partners  or  not ;  but  not  to  two  or  more 
drawees  in  the  alternative  or  in  succession." -^^  This  provision 
of  the  negotiable  instruments  laws  seems  to  render  a  bill  ad- 
dressed to  two  or  more  drawees  in  the  alternative  or  in  succession 
not  only  non-negotiable  but  invalid.  By  another  provision,  in- 
struments payable  to  the  order  of  "one  or  some  of  several  payees" 
are  payable  to  order  and  are  negotiable.-^^  IIow  the  courts  will 
harmonize  these  apparently  inconsistent  provisions  remains  to 
be  seen. 


Certainty  as  to  Place  of  Payment. 

§  55.    It  is  not  necessary  to  the  validity  of  a  negotiable  instru- 
ment that  it  should  state  the  place  where  it  is  payable. 

234  Funk  V.  Babbitt,  156  III.  408,  41  N.  E.  166. 

235  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or., 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  128);  Ariz.  (§  3431);  111. 
r§  127);  Kan.  (§  135);  Md.  (§  147);  Mich.  (§  130);  Neb.  (§  127);  N.  Y. 
(§  212);  Ohio  (§  3175  s);  R.  L  (§  136);  Wis.  (§  1680  b). 

The  words  ''or  in  succession"  are  not  in  the  Wisconsin  Negotiable  In- 
struments Law. 

The  word  "or"  before  "determinable"  was  omitted  in  the  law  as  first 
adopted  in  Nev/  York,  but  the  omission  was  supplied  by  amendment. 
Laws  1898,  c.  336,  §  25. 

236  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C.,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Alont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or., 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  8);  Ariz.  (§  3311);  111. 
(§  8);  Kan.  (§  15);  Md.  (§  27);  Mich.  (§  10);  Neb.  (§  8);  N.  Y.  (§  27); 
Ohio  (§  3171a);  R.  I.  (§  16);  Wis.  (§  1675-8). 

See,  also,  post,  §  50,  and  notes. 


§  56  PLACE  OF   PAYiMENT.  85 

S  56.  Where  no  place  of  payment  is  specified  and  no  address  is 
given,  the  instrument  is  payable  at  the  usual  or  last  known 
place  of  business  or  residence  of  the  person  to  make  pay- 
ment or  at  any  place  he  can  be  found. 

Certainty  as  to  place  of  payment. 

It  is  not  necessary  to  the  validity  or  negotiability  of  an  in- 
strument that  it  sliould  state  the  place  where  it  is  p.iyahle."^^^ 
Thi.s  alters  the  rule  in  those  states  Avlicro  an  instrnraent  is  not 
negotiable  unless  it  is  payable  at  a  bank  or  a  banking  hoiisc-^^ 

Place  not  stated — Instrument  payable  at  residence  or  place  of 
business. 

"Where  a  place  of  payment  is  named,  the  instrument  is  payable 
there  ;22^  but  if  no  place  of  payment  is  named,  the  instrument  is 
payable  at  the  usual  place  of  business  or  the  residence  ol  the  pcr- 

237  N eg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  F\a.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  On, 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  6);  Ariz.  (§  3309);  111. 
(§  6);  Kan.  (§  13);  Md.  (§  25);  Mich.  (§  8);  Neb.  (§  6);  N.  Y.  (§  25); 
Ohio  (§  3171  e);  R.  I.  (§  14);  Wis.  (§  1675-6). 

See,  also,  Bank  of  America  v.  Woodworth,  18  Johns.  (N.  Y.)  315;  Bank 
of  Newberry  v.  Richards,  35  Vt.  381. 

238  Alabama  (Code,  §§  1765,  2594);  Indiana  (Horner's  Rev.  St.  1881,  § 
5506);  Kentucky  (St.  §  483);  West  Virginia  (Code,  c.  99,  §  7). 

The  Virgina  statute  (Code,  §  2849,  Code,  1873,  c.  141,  §  7)  was  repealed 
by  the  negotiable  instruments  law.  Where  the  statutory  requirement  is 
that  the  instrument  be  made  payable  at  a  particular  bank  within  the  state, 
it  is  not  negotiable  if  made  payable  at  a  bank  in  another  state.  See 
Bank  of  Marietta  v.  Pindall,  2  Rand.  (Va.)  465.  See  preceding  note  as 
to  repeal  of  statute  on  which  this  decision  was  based.  Nor  if  made  pay- 
able at  "either  of  the  banking  houses"  in  a  certain  city  in  the  state.  Free- 
man's Bank  v.  Ruckman,  16  Grat.  (Va.)  126.  See,  also,  Smith  v.  Rob- 
inson, 11  Ala.  270. 

239  For  consitruction  of  various  instruments,  where  the  place  of  pay- 
ment given  was  ambiguous,  see  Miller  v.  Powers,  16  Ind.  410;  Lane  v. 
Union  Nat.  Bank,  3  Ind.  App.  299,  29  N.  E.  613;  Hazard  v.  Spencer,  17 
R.  I.  561,  23  Atl.  729. 


^6  ESSENTIALS    OF   NEGOTIABILITY.  §  57 

?on  who  is  to  make  payment,  or  at  any  place  where  such  peraun 
can  be  found.-^° 


Additional  Provisions   Not  Affecting  Negotiability. 

§  57.     The  negotiable  character  of  an  instrument  otherwise  is 
not  affected  by  a  provision  which : 

1.  Authorizes  the  sale  of  collateral   securities  in  case 

the  instrument  be  not  paid  at  maturity; 
But  conditional  sale  notes  are  usually  deemed  non- 
negotiable  ; 

2.  Authorizes  a  confession  of  judgment  if  the  instru- 

ment be  not  paid  at  maturity; 

3.  Waives  the  benefit  of  any  law  intended  for  the  ad- 

vantage or  protection  of  the  obligor;  or 

4.  Gives  the  holder  an  election  to  require  something  to 

be  done  in  lieu  of  payment  of  money; 

But  an  instrument  which  contains  an  order  or 
promise  to  do  any  act  in  addition  to  the  payment  of 
money  is  not  negotiable. 

§  58.    But  nothing  herein  validates  any  provision  or  stipulation 
otherwise  illegal. 

Provision  for  sale  of  collateral  securities. 

The  negotiable  character  of  an  instrument  otherwise  negotiable 
is  not  affected  by  a  provision  which  authorizes  the  sale  of  col- 
lateral securities  if  the  instrument  be  not  paid  at  maturity.""    So, 

240  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or., 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  72,);  Ariz.  (§  3376);  111. 
(§  7?>);  Kan.  (§  80);  Md.  (§  92);  Mich.  (§  75);  Neb.  (§  73);  N.  Y.  (§  L33); 
Ohio   (§  3173  r);  R.  I.   (§  81);  Wis.   (§  1678-3). 

Place  of  presentment  where  no  place  is -stated,  see  post,  §  192. 

2*1  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,   Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,   N.   M.,  N.   C,   N.   D.,   Okl.,   Or., 


§58  SALE  Ul<"  COLLATERAL  SECURITIES.  87 

a  recital  that  tlie  inakor  has  deposited  certain  cortincates  ns  col- 
lateral does  not  destroy  negotiability ,2*-  nor  a  recital  that,  on  non- 
payment, the  holder  may  sell  the  collateral  and  apply  the  pro- 
ceeds to  "payment  and  necessary  charges."-'^  But  a  contract  in 
an  instrument  for  the  payment  of  money,  that  the  payee  m;iy  sell 
certain  warehouse  receipts  given  as  collateral,  and,  if  they  depreci- 
ate in  value,  may  sell  them  before  the  instrument  would  other- 
wise become  due,  in  which  case  the  proceeds,  less  expenses,  shall 
be  applied  in  payment  or  part  payment  of  tlie  debt,  and  that  any 
deficiency  shall  become  due  forthwith,  renders  the  instrument  non- 
negotiable,  the  court  saying:  "We  find  that  such  alternative  con- 
tract introduces  two  elements  of  uncertainty  in  the  instruments,  to- 
wit,  in  the  sum  payable  in  case  any  sum  become  due  before  the  time 
first  specified  in  the  instrument,  and  in  the  time  when  the  same 
shall  so  become  due."  ^^^  Under  the  corresponding  provision  of  the 
English  Bills  of  Exchange  Act  1882  (45  &  46  Vict.  c.  61,  §  83, 
f^ubd.  3),  that  a  note  "is  not  invalid  by  reason  only  that  it  contains 
also  a  pledge  of  collateral  security,  with  authority  to  sell  or  dis- 
pose thereof,"  it  has  been  held  that  a  note  containing  more  than 
is  there  referred  to  is  not  a  promissory  note,  and  that  hence  a 
note  providing  for  payment  of  a  sum  certain  in  instalments,  de- 
fault in  payment  of  any  one  instalment  to  mature  the  whole,  and 


Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  5);  Ariz.  (§  3308);  111. 
(§  5);  Kan.  (§  12);  Md.  (§  24);  Mich.  (§  7);  Neb.  (§  5);  N.  Y.  (§  24); 
Ohio  (§.3171d);  R.  I.  (§  13);  Wis.  (§1675-5). 

See,  also,  Arnold  v.  Rock  River  Val.  R.  Co.,  14  N.  Y.  Super.  Ct.  (5 
Duer)  207;  National  Bank  v.  Gary,  18  S.  C.  282;  Perry  v.  Bigelow,  128 
Mass.  129,  25  Am.  Rep.  40;  Bank  of  Carroll  v.  Taylor,  67  Iowa,  572,  25 
N.  W.  810;  Gravert  v.  Goothard,  81  Neb.  99,  115  N.  W.  559. 

242  Towne  v.  Rice,  122  Mass.  67. 

243  Valley  Nat.  Bank  of  Chambersburg  v.  Crowell,  148  Pa.  284,  23  Atl. 
1068,  33  Am.  St.  Rep.  824. 

Notes  which  are  themselves  given  as  collateral  security  are  not  nego- 
liable.  American  Nat.  Bank  v.  Sprague,  14  R.  I.  410;  Haskell  v.  Lambert, 
82  Mass.  592;  Costelo  v.  Crowell,  127  Mass.  293,  34  Am.  Rep.  367. 

244  Continental  Nat.  Bank  v.  Wells,  73  Wis.  332,  41  N.  W.  409,  citing 
Morgan  v.  Edwards,  53  Wis.  599,  11  N.  W.  21,  40  Am.  Rep.  781;  First 
.Mat.  Bank  v.  Larsen,  60  Wis.  206,  19  N.  W.-67,  50  Am.  Rep.  365;  Cushman 
V.  Haynes,  37  Mass.  (20  Pick.)  132. 


bS  ESSENTIALS    OF   NEGOTIABILITY.  §  58 

containing  the  clause,  "No  time  given  to,  or  security  taken  from, 
or  composition  or  arrangements  entered  into,  with  either  party 
hereto,  shall  prejudice  the  rights  of  the  holder  to  proceed  against 
any  other  party,"  is  not  a  promissory  note,  and  cannot  be  de- 
clared on  as  such  by  an  indorsee.^^^ 

Conditional  sale  notes — Not  negotiable. 

A  provision  in  a  note,  otherwise  negotiable,  that  the  title  to  the 
property  for  which  it  was  given  shall  remain  in  the  vendor  until 
the  note  is  paid,  has  generally  been  held  not  to  destroy  negotia- 
bility;-*^ but  the  rule  is  otherwise  in  some  of  the  states.^*"^  In 
New  York  it  has  already  been  decided  that  such  a  note  is  not 
negotiable  under  the  negotiable  instruments  laws.^*^  The  reason 
for  treating  a  conditional  sale  note  as  non-negotiable  is  stated  by 
Cornell,  J.,  in  Third  Nat.  Bank  v.  Armstrong  as  follows:  *'If, 
prior  to  any  default  on  the  part  of  the  defendant  (maker),  the 
company  (payee)  had  retaken  possession  of  the  property,  and 
disposed  of  it,  so  that,  upon  the  maturity  of  the  defendant's  ob- 
ligation, an  observance  of  the  condition  on  its  part  had  become 
impossible,  there  can  be  no  doubt  that,  under  such  circumstances, 
no  action  could  have  been  maintained  on  his  promise.  "^^^ 

Judgment  notes — Neg-otiable. 

A  provision  in  a  note  authorizing  a  confession  of  judgment 
thereon  if  it  is  not  paid  at  maturity,  or  a  warrant  or  power  of 

245  Kirkwood  v.  Smith  [1895]  1  Q.  B.  Div.  582. 

246  Chicago  R.  Equip.  Co.  v.  Merchants'  Nat.  Bank,  136  U.  S.  268,  34 
Law.  Ed.  349;  First  Nat.  Bank  of  Montgomery  v.  Slaughter,  98  Ala.  602, 
14  So.  545,  39  Am.  St.  Rep.  88;  Mott  v.  Havana  Nat.  Bank,  22  Hun  (N. 
Y.)  354;  W.  W.  Kimball  Co.  v.  Mellon,  80  Wis.  133,  48  N.  W.  1100;  Choate 
V.  Stevens,  116  Mich.  28,  74  N.  W.  289,  43  L.  R.  A.  277,  changing  rule  in 
Michigan.  See  Wright  v.  Traver,  73  Mich.  493,  41  N.  W.  517,  3  L.  R. 
A.  50. 

247  South  Bend  Iron  Works  v.  Paddock,  37  Kan.  510;  Third  Nat.  Bank 
V.  Armstrong,  25  Minn.  530;  Stevens  v.  Johnson,  28  Minn.  172,  9  N.  W. 
677. 

248  Third  Nat.  Bank  of  Buffalo  v.  Spring,  28  Misc.  9,  59  N.  Y.  Supp.  794. 

249  Third  Nat.  Bank  v.  Armstrong,  25  Minn.  530. 


§58  WAIVING    STATUTORY    RIGHTS.  89 

attorney  to  confess  judgment  attached  to  the  note,  makes  the  in- 
strument what  is  commonly  called  a  "judgment  note,"  but  does 
not  affect  its  negotiability.^so  It  seems,  however,  that  the  war- 
rant of  attorney  must  authorize  a  confession  of  judgment  in 
favor  of  the  "holder"  or  the  "legal  holder,"  or  the  instrument 
will  not  be  negotiable.^^i  The  provision  should  be  definite,  and 
neither  a  note  payable  in  ninety  days,  containing  a  power  of  at- 
torney to  confess  judgment  "at  any  time  hereafter, "  ^^e  nor 
one  containing  a  power  of  attorney  to  enter  judgment  on  it  at  any 
time  after  its  date,  whether  due  or  not,^^^  are  negotiable.  An 
illegal  provision  for  a  confession  of  judgment  does  not  render  a 
note  non-negotiable.^^* 

Instruments  waiving  statutory  rights — Negotiable. 

The  negotiability  of  an  instrument  otherwise  negotiable  is  not 
destroyed  by  a  provision  which  waives  the  benefit  of  any  law 
intended  for  the  advantage  or  protection  of  the  obligor.-^^  -phis 
provision  of  the  negotiable  instruments  laws  relates  to  instru- 
ments which  contain  a  waiver  of  the  -benefit  of  appraisement, 
stay,  exemption,  or  homestead  laws.  The  theory  upon  which  the 
negotiability  of  instruments  of  this  nature  rests  is  that  such 
provisions  do  not  in  any  way  clog  negotiation,  but  rather  expe- 

250  N eg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl..  Or., 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  5);  Ariz.  (§  3308):  111. 
(§  5);  Kan.  (§  12);  Md.  (§  24);  Mich.  (§  7);  Neb.  (§  5);  N.  Y  (^  24); 
Ohio  (§  3171  d);  R.  I    (§  13);  Wis.  (§  1675-5). 

See,  also,  Kemp  v.  Klaus,  8  Neb.  24;  Osborn  v.  Hawlev,  19  Ohio,  130. 
Contra,  see  Sweeney  v.  Thuckstun,  11  Pa.  131. 

251  Ream  v.  Merchants'  Nat.  Bank,  2  Ohio  Cir    Ct.  R.  43. 

252  Richards  v.  Barlow,  140  Mass.  218,  6  N.  E.  68. 

253  Time  of  payment  depends  upon  the  whim  or  caprice  of  the  holder 
and  is  absolutely  uncertain.  Wisconsin  Yearly  Meeting  of  Freewill  Bap- 
tists V.  Bahle,  1J5  Wis.  289,  91  N.  W.  678 

254Tolman  v.  Janson,  106  Iowa,  455,  76  N.  W   732. 

255  Subdivision  3,  same  sections  of  negotiable  instruments  laws  as  last 
above  cited. 

See,  also,  Schlesinger  v.  Arlinc,  31  Fed.  648;  Hughitt  v.  Johnson,  28 
Fed.  865;  Lyon  v.  Martin,  31  Kan.  411. 


90  ESSENTIALS    OF   NEGOTIABILITY.  §  58 

dite  it  by  giving  additional  value  to  the  instruments.^^^  A  waiver 
of  statutory  requirements  as  to  notice  of  protest  and  diligence  in 
bringing  suit  also  falls  within  this  section.^s^  But  nothing  herein 
is  to  be  deemed  as  validating  any  provision  or  stipulation  other- 
wise illegal.  In  Wisconsin  the  effect  of  this  section  is  specifically 
limited  by  providing  that  nothing  therein  shall  authorize  a 
waiver  of  exemptions  from  execution ;  ^^  and  in  North  Carolina 
the  negotiable  instruments  law  provides  that  nothing  in  the  law 
shall  authorize  the  enforcement  of  a  stipulation  waiving  exemp- 
tions, though  the  mention  of  such  a  stipulation  in  an  instrument 
shall  not  affect  its  negotiability .^^^ 

Instruments  giving  holder  election  to  require  something  to  be  done 
in  lieu  of  payment  in  money. 

A  provision  of  this  nature  does  not  destroy  negotiability.^^" 
The  point  is  illustrated  by  cases  in  which  the  holder  was  author- 
ized to  take  corporate  stock"^^^  or  merchandise  2^2  in  lieu  of  money. 

Instruments  with  a  provision  of  this  kind  must  be  distinguished 
carefully  from  the  instruments  heretofore  considered,  wherein 
the  option  is  in  favor  of  the  maker,  allowing  him  to  pay  in  the 
alternative. 


256  Zimmerman  v.  Anderson,  67  Pa.  421.  5  Am.  Rep.  447.  But  see  Over- 
ton V.  Tyler.  3  Pa.  346.  45  Am.  Dec.  645. 

257  See  Hegeler  v.  Comstock,  1  S.  D.  138,  45  N.  W.  331.  8  L.  R  A.  393, 
where  the  provision  w^as  that  the  endorsers,  signers,  and  guarantors  sev- 
erally waive  presentment,  protest,  notice,  and  diligence  in  bringing  suit, 
but  where  the  note  was  held  non-negotiable  for  uncertainty  as  to  the 
amount  payable,  and  for  containing  contracts  other  than  for  the  pay- 
menr  of  money  in  violation  of  Comp.  Laws,  §  4462. 

258  Negotiable  Inst.  Law,  §  1675-5,  subd.  5, 

259  Negotiable  Inst.  Law,  §  197. 

260  Subdivision  4.  same  sections  of  negotiable  instruments  laws  as  last 
above  cited. 

261  Hodges  V.  Shuler.  22  N.  Y.  114. 

262  Hosstatter  v.  Wilson,  36  Barb.  (^N.  Y.^  307. 


§  58  MEDIUM  OF  PAYMENT.  91 

Instruments  promising  to  Co  something  in  addition  to  payment  of 
money. 

An  instrument  which  contains  an  order  or  promise  to  do  any 
act  in  addition  to  payment  of  money  is  not  negotiable.^^^  Thus, 
an  instrument  which,  in  addition  to  a  promise  to  pay  money  for 
the  hire  of  a  slave,  promised  to  furnish  the  slave  witli  clothinjj, 
is  not  negotiable.'^^*  But  an  order  written  under  a  note  as  fol- 
lows: "Levi  Mason,  Esq.:  Please  pay  the  above  note,  and  hold 
it  against  me  in  our  settlement,"  is  a  good  bill  of  exchange,  as 
"the  retaining  of  the  note  as  a  voucher  is  no  more  the  perform- 
ance of  another  act  beside  the  payment  of  the  money  than  the  re- 
taining the  order  itself  for  the  same  purpose.  "^65 

263  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or., 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo,  (§  5);  Ariz.  (§  3308);  111. 
(§  5);  Kan.  (§  12);  Md.  (§  24);  Mich.  (§  7);  Neb.  (§  5);  N.  Y.  (§  24); 
Ohio  (§  3171  d);  R.  I.  (§  13);  Wis.  (§  1675-5). 

Kimpton  v.  Studebaker  Bros.  Co.,  14  Idaho,  552,  94  Pac.  1039,  125  Am. 
St.  Rep.  185. 

264  Havens  v.  Potts,  86  N.  C.  31.  See,  also,  Austin  v.  Burns,  16  Barb. 
(N.  Y.)  643. 

265  Leonard  v.  Mason,  1  Wend.  (N.  Y.)  S2Z 


CHAPTER  V. 

CONSIDERATION. 

§  59.  Presumption  of  Consideration. 

§  60.  Sufliciency  of  Consideration. 

§  61.  Antecedent  or  Pre-existing  Debt. 

§  62.  Lienholders. 

§  63.  Want  or  Failure  of  Consideration. 

§  64.  Inadequacy  of  Consideration. 

§  65.  Accommodation  Paper. 

§  66.  Liability  of  Accommodation  Party  to  Holder  for  Value. 

Presumption  of  Consideration. 

§  59.  Every  negotiable  instrument  is  deemed  prima  facie  to  have 
been  issued  for  a  valuable  consideration,  and  every  per- 
son whose  signature  appears  thereon  to  have  become  a 
party  thereto  for  value. 

Consideration  is  presumed. 

One  of  the  most  important  differences  between  negotiable  and 
non-negotiable  instruments  is  that  a  consideration  for  the  former 
is  presumed/  while    the    consideration  for  the   latter  must  be 

1  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or., 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  24);  Ariz.  (§  3327);  111. 
(§  24);  Kan.  (§  31);  Md.  (§  43);  Mich.  (§  26);  Neb.  (§  24);  N.  Y.  (§  50); 
Ohio  (§  3171  w);  R.  L  (§  32);  Wis.  (§  1675-50). 

Bank  of  Monticello  v.  Dooly,  113  Wis.  590,  89  N.  W.  490;  Hickok  v. 
Bunting,  92  App.  Div.  167,  86  N.  Y.  Supp.  1059;  Dawson  v.  Wombles,  123 
Mo.  App.  340,  100  S.  W.  547;  Lassos  v.  McCarty,  47  Or.  474,  84  Pac.  76; 
Black  V.  First  Nat.  Bank,  96  Md.  399,  54  Atl.  88;  Gilpin  v.  Savage,  60 
Misc.  605,  112  N.  Y.  Supp.  802;  Munsey  v.  Dempsey,  60  Misc.  317,  113  N. 
Y.  Supp.  271;  Zimbleman  v.  Finnegan  (Iowa)  118  N.  W.  312.     Bank  can 

92 


§59  CONSIDERATION    PRESUMED.  $3 

proved.^  Under  this  rule,  every  person  whose  signature  appears 
on  a  negotiable  instrument  is  presumed  to  have  become  a  party 
thereto  for  value.^  There  is  a  presumption  not  only  tliat  a  nego- 
tiable instrument  was  based  on  a  consideration,  but  that  it  was 

presume  that  check  deposited  with  it  was  issued  for  value.  Faile  v.  Craw- 
ford, 34  App.  Div.  278,  54  N.  Y.  Supp.  264.  Burden  of  proving  lack  of 
consideration  is  on  defendant.  Joveshof  v.  Rockey,  58  Misc.  559,  109  N. 
Y.  Supp.  818;  Culbertson  v.  Salinger  (Iowa)  117  N.  W.  6.  It  has  already 
been  held  in  New  York  under  these  sections  that  a  bank  cannot  presume 
that  a  check  deposited  with  it  was  issued  for  value.  Riverside  Bank  v. 
Woodhaven  Junction  Land  Co.,  34  App.  Div.  266,  54  N.  Y.  Supp.  266. 

See,  also,  cases  cited  in  note  4,  infra. 

On  shifting  of  the  burden  of  proof,  see  Perley  v.  Perley,  144  Mass.  104, 
10  N.  E.  726. 

Consideration  for  indorsement  or  transfer,  see  post,  §  125. 

Purchase  for  value,  essential  of  purchase  in  due  course,  see  post,  § 
167. 

2  Bristol  V.  Warner,  19  Conn.  7;  Courtney  v.  Doyle,  92  Mass.  (10  Allen) 
122;  Averett's  Adm'r  v.  Booker,  15  Grat.  (Va.)  163,  76  Am.  Dec.  203. 

The  doctrine  heretofore  in  force  in  New  York  as  shown  by  the  de- 
cisions in  Carnwright  v.  Gray,  127  N.  Y.  92,  27  N.  E.  835,  24  Am.  St.  Rep. 
424,  12  L.  R.  A.  845;  Kimball  v.  Huntington,  10  Wend.  (N.  Y.)  675,  25 
Am.  Dec.  590,  and  President,  etc.,  of  Goshen  &  M.  Turnpike  Road  v.  Hur- 
tin,  9  Johns.  (N.  Y.)  217,  6  Am.  Dec.  273,  that  a  consideration  for  a  non- 
negotiable  instrument  is  presumed,  is  now  nullified  by  the  provisions  of 
the  negotiable  instruments  law. 

In  Colorado  the  rule  as  to  consideration  for  a  transfer  of  a  non-nego- 
tiable instrument  has  not  been  changed  by  the  negotiable  instruments 
law,  for  it  was  already  the  rule  in  that  state  that  a  transferee  of  a  non- 
negotiable  note  takes  only  the  rights  of  the  prior  holder,  and  any  de- 
fense good  against  such  holder  is  good  against  him.  Mulligan  v.  Smith, 
13  Colo.  App.  231,  57  Pac.  731. 

Want  of  consideration  may  be  shown  in  an  action  on  a  non-ncg^tiable 
instrument,  though  the  consideration  is  mentioned  in  the  instrument 
itself  as  executed,  for  such  admission  is  in  the  nature  of  a  receipt  and 
is  only  prima  facie  evidence  of  consideration.  Mulligan  v.  Smith,  13 
Colo.  App.  231,  57  Pac.  731. 

3  Same  sections  of  negotiable  instruments  laws  as  last  above  cited. 
Bank  of  Monticello  v.  Dooly,  113  Wis.  590,  89  N.  W.  490;   Hickok  v. 

Bunting,  92  App.  Div.  167,  86  N.  Y.  Supp.   1059;  Lynchburg  Milling  Co. 
V.  National  Exch.  Bk.  (Va.)  64  S.  E.  980. 
See  ante,  note  1. 


94  CONSIDERATION.  §  60 

based  on  a  sufficient  consideration,^  and  this  presumption  applies 
alike  to  instruments  expressing  "value  received"^  and  to  those 
not  expressing  a  consideration.^  It  is  also  presumed  that  the  con- 
sideration was  legal/  and  a  maker  denying  liability  or  defending 
on  the  ground  of  the  illegality  of  the  consideration  has  the  bur- 
den of  showing  such  illegality.^  The  presumption  of  consideration 
is  not  conclusive  and  may  be  rebutted,^  but  the  rebutting  evi- 
dence, to  be  effectual,  must  show  an  actual  want  of  considera- 
tion.io 


Sufficiency  of  Consideration. 

§  60.  Value  is  any  consideration  sufficient  to  support  a  simple 
contract. 

§  61.  An  antecedent  or  pre-existing  debt  constitutes  value,  and 
is  deemed  such  whether  the  instrument  is  payable  on  de- 
mand or  at  a  future  time. 

4  Younglove  v.  Cunningham  (Cal.)  43  Pac.  755;  Perot  v.  Cooper,  17 
Colo.  80,  28  Pac.  391,  31  Am.  St.  Rep.  258;  Bristol  v.  Warner,  19  Conn 
7;  Lines  v.  Smith,  4  Fla.  47;  Whitney  v.  Clary,  145  Mass.  156,  13  N.  E. 
393;  Hegeman  v.  Moon,  131  N.  Y.  462,  30  N.  E.  487;  Carnwright  v.  Gray, 
127  N.  Y.  92,  27  N.  E.  835,  24  Am.  St.  Rep.  424,  12  L.  R.  A.  845;  Campbell 
V.  McCormac,  90  N.  C.  491;  Wilson  v.  Wilson,  26  Or.  315,  38  Pac.  189; 
First  Nat.  Bank  v.  Foote,  12  Utah,  157.  42  Pac.  205;  Du  Pont  v.  Beck,  81 
Ind.  271;  Perley  v.  Perley,  144  Mass.  104,  10  N.  E.  726;  Nichols  &  Shep- 
ard  Co.  v.  Dedrick,  61  Minn.  513,  63  N.  W.  1110;  Conmey  v.  Macfarlane, 
97  Pa.  361. 

SQamewell  v.  Mosely,  11  Mass.  (11  Gray)  173;  Howell  v.  Wright,  41 
Hun  (N.  Y.)  167;  Stronach  v.  Bledsoe,  85  N.  C.  473. 

'^  See  cases  cited  in  note  4,  supra. 

Statement  of  consideration  not  necessary  to  negotiability,  see  ante,  § 
32. 

7  Cundifif  v.  Campbell,  40  Tex.  142. 

sWyman  v.  Fiske,  85  Mass.  (3  Allen)  238,  80  Am.  Dec.  66;  Brigham  v. 
Potter,  80  Mass.  (14  Gray)  522;  Pixley  v.  Boynton,  79  111.  351;  Hapgood 
V.  Needham,  59  Me.  442. 

9  Carrol  v.  Peters,  1   McGloin   (La.)  88. 

10  Black  River  Sav.  Bank  v.  Edwards.  1(i  Mass.  (10  Gray)  ZZ1 ;  White 
V.  Davis,  62  Hun,  622,  17  N.  Y.  Supp.  548. 


§62  SUFFICIENCY   OF  CONSIDERATION.  95 

§  62.  V7here  the  holder  has  a  lien  on  the  instrument,  arising 
either  from  contract  or  by  implication  of  law,  he  is  deemed 
a  holder  for  value  to  the  extent  of  his  lien. 

Sufficiency  of  consideration. 

It  is  a  general  rule  that  any  consideration  which  will  support 
any  other  simple  contract  will  sustain  a  negotiable  instrument.^^ 
Thus,  money  or  services/^  scrip  for  corporate  stock,^^  agreeing  to 
the  change  of  collateral  securities,^*  a  waiver  of  legal  rights,^^  qj. 
a  forbearance  to  enforce  such  rights,^^  constitutes  a  sufficient  con- 
sideration for  a  negotiable  instrument.    So,  also,  the  undertaking 

11  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or., 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  25);  Ariz.  (§  3328);  111. 
C§  25);  Kan.  (§  32);  Md.  (§  44);  Mich.  (§  27);  Neb.  (§  25);  N.  Y.  (§  51); 
Ohio  (§  3171  x);  R.  I.  (§  33);  Wis.  (§  1675-51). 

Matlock  V.  Scheuerman  (Or.)  93  Pac.  823. 
Consideration  for  indorsememt  or  transfer,  see  post,  §  125. 
Purchase  for  value,  essential  to  character  as  holder  in  due  course,  see 
post,  §  167. 

12  Miller  V.  McKenzie,  95  N.  Y.  575,  47  Am.  Rep.  85;  Ould  v.  Myers,  23 
Grat.  (Va.)  383. 

13  Scrip  for  shares  of  stock  in  an  existing  corporation  form  a  sufficient 
consideration.  Avon  Springs  Sanitarium  Co.  v.  Kellogg,  125  App.  Div. 
51,  109  N.  Y.  Supp.  153.  But  subscription  to  stock  before  company  is 
incorporated  is  not  a  valid  consideration.     Id. 

14VOSS  V.  Chamberlain  (Iowa)   117  N.  W.  269. 

15  Sykes  v.  Lafferry,  27  Ark.  407;  Byington  v.  Simpson,  134  Mass.  145; 
Montgomery  v.  Morris,  32  Ga.  173.  Release  of  indorser  on  a  forged  in- 
strument constitutes  "value."  Jennings  v.  Law,  199  Mass.  124,  85  N.  E. 
157. 

16  Hindert  v.  Schneider,  4  111.  App.  203;  Austell  v.  Rice,  5  Ga.  472;  Rob- 
inson V.  Gould,  65  Mass.  (11  Cush.)  55;  Mechanics'  &  Farmers'  Bank  v. 
Wixson,  42  N.  Y.  438.  Agreement  to  forbear  suit  on  an  existing  indebt- 
edness. Milius  V.  Kauffmann,  104  App.  Div.  442,  93  N.  Y.  Supp.  669.  Ac- 
ceptance of  note' paj^able  in  the  future,  for  goods  sold  and  delivered,  op- 
erates as  a  forbearance  of  the  right  to  sue  until  the. maturity  of  the  note.i 
J.  H.  Mohlman  Co.  v.  McKane,  60  App.  Div.  546,  69  N.  Y.  Supp.  1046. 
One  surrendering  old  note  and  accepting  new  note  held  a  holder  for 
value.  Van  Norden  Trust  Co.  v.  Rosenberg,  62  Misc.  285,  114  N.  Y.  Supp. 
1025. 


96  CONSIDERATION.  §62 

and  obligation  of  a  remote  indorsee  who  takes  the  paper  as  col- 
lateral security  to  make  presentment  for  payment  and  give  no- 
tice of  nonpayment  constitutes  a  sufficient  consideration  for  the 
transfer.^''  The  consideration,  however,  must  not  be  affected  with 
illegality,^^  for,  where  part  of  the  consideration  for  a  note  is 
illegal,  the  entire  promise  fails.^^  AVhile  generally  a  consideration 
passing  to  one  of  several  joint  makers  will  sustain  the  instrument 
as  against  the  others,^^  still  the  difference  between  a  solvent  and 
an  insolvent  signer  of  a  note  is  a  valuable  consideration  to  an- 
other who  signs,  relying  on  the  financial  responsibility  of  those 
who  join  as  makers.^^ 

On  the  theory  that  mutual  promises  sustain  each  other,  one 
promissory  note  is  a  sufficient  consideration  for  another  given  for 
it,--  and  a  bill  of  exchange  is  a  sufficient  consideration  for  a  note 
given  in  exchange,-^  and  a  check  is  a  sufficient  consideration  for 
a  bilL^* 

Antecedent  or  pre-existing  debt;  lien  holders. 

Taking  a  negotiable  instrument  for  an  antecedent  or  pre-exist- 
ing debt  involves  a  forbearance  on  the  part  of  the  creditor,  and 
such  a  debt  constitutes  value,  both  for  instruments  payable  on 

17  In  re  Hopper-Morgan  Co.,  154  Fed.  249. 

18  Where  agent  o^  seller  receives  commission  of  latter,  a  note  executed 
by  the  buyer  representing  an  additional  bonus  or  commission  on  the 
sale  is,  unless  expressly  agreed  to,  without  consideration  and  voidable. 
Shelton  Implement  Co.  v.  Schieck,  81  Neb.  826,  116  N.  W.  951. 

19  First  Nat.  Bank  of  El  Paso  v.  Miller,  235  111.  135,  85  N.  E.  312. 

20  McAfee  v.  Glen  Mary  Coal  &  Coke  Co.,  97  Ala.  709,  11  So.  881;  West- 
phal  V.  Nevills,  92  Cal.  545,  28  Pac.  678;  Isaack  v.  Porter,  9  Ky.  (2  A.  K. 
Marsh.)  452;  Hoxie  v.  Hodges,  1  Or.  251;  Rutland  v.  Brister,  53  Miss. 
683. 

21  City  Deposit  Bank  v.   Green,   138  Iowa,   156,   115   N.  W.  893. 

22  Rice  V.  Grange,  131  N.  Y.  149,  30  N.  E.  46,  afg.  60  Hun,  583,  14  N.  Y. 
Supp.  911;  Wilson  v.  Denton,  82  Tex.  531,  27  Am.  St.  Rep.  908;  Higginson 
V.  Gray,  47  Mass.  (6  Mete.)  212;  Dockray  v.  Dunn,  37  Me.  442. 

23  Newman  v.  Frost,  52  N.  Y.  422. 

24  Mayer  v.  Heidelbach,  4  N.  Y.  Supp.  529;  Matlock  v.  Scheuerman  (Or.) 
93  Pac.  823. 


§  62  ANTECEDENT  OR  PRE-EXISTING  DEBT.  97 

demand  and  those  payable  at  a  future  time.-^  The  provision  of 
the  negotiable  instruments  laws  that  an  antecedent  or  pre-exist- 
ing debt  constitutes  value  follov^'s  the  rule  in  force  in  the  federal 
eourts,26  and  the  rule  previously  in  force  in  some  of  the  states,27 
but  changes  the  rule  in  others.^^  In  deciding  cases  under  this  sec- 
tion, the  courts  have  reached  different  conclusions  as  to  the  effect 
of  the  act  upon  existing  law.  Some  of  the  New  York  courts  hold 
that  it  makes  no  change  in  the  law  as  it  previously  existed  in  that 
state,  and  that  in  order  that  an  antecedent  debt  may  constitute 
value,  the  antecedent  debt  must  have  been  canceled  and  dis- 
charged on  the  acceptance  of  the  instrument  or  the  time  of  pay- 

25Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or., 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  25);  Ariz.  (§  3328);  111. 
(§  25);  Kan.  (§  32);  Md.  (§  44);  Mich.  (§  27);  Neb.  (§  25);  N.  Y.  (§  51); 
Ohio  (§  3171  x);  R.  L  (§  33);  Wis.  (§  1675-51). 

Voss  V.  Chamberlain  (Iowa)  117  N.  W.  269;  Boston  Steel  &  Iron  Co. 
V.  Steuer,  183  Mass.  140,  66  N.  E.  646,  97  Am.  St.  Rep.  426;  Milius  v.  Kauff- 
mann,  104  App.  Div.  442,  93  N.  Y.  Supp.  669;  Mundlin  v.  Appelbaum,  62 
Misc.  300,  114  N.  Y.  Supp.  908;  Bigelow  Co.  v.  Automatic  Gas  Producer 
Co.,  56  Misc.  389,  107  N.  Y.  Supp.  894;  Manufacturing  Co.  v.  Summers, 
143  N.  C.  102,  55  S.  E.  522;  Hermann's  Ex'r  v.  Gregory  (Ky.)  115  S.'W. 
809;  In  re  Hopper-Morgan  Co.,  154  Fed.  249;  J.  H.  Mohlman  Co.  v.  Mc- 
Kane,  60  App.  Div.  546,  69  N.  Y.  Supp.  1046;  Lowell  v.  Bickford,  201  Mass. 
543,  88  N.  E.  1.  Notes  given  for  a  pre-existing  indebtedness  on  considera- 
tion that  the  maker^a  commercial  firm,  be  allowed  to  sell  its  stock  to  pay 
creditors,  and  that  the  payee  furnisli  it  new  stock,  held  for  a  valuable  con- 
sideration.    Richardson  v    Wren  (Ariz.)  95  Pac.  124. 

26  Railroad  Co.  v.  National  Bank,  102  U.  S.  14,  26  Law.  Ed.  61;  Swift 
V.  Tyson,  41  U.  S.  (16  Pet.)   1,  10  Law.  Ed.  166. 

27  Roberts  v.  Hall,  37  Conn.  205,  9  Am.  Rep.  308;  Leach  v.  Lewis,  8  D. 

C.  (1  McArthur)  112;  Cecil  Bank  v.  Heald,  25  Md.  562;  Maitland  v.  Citi- 
zens' Nat.  Bank,  40  Md.  540,  17  Am.  Rep.  620;  Wooley  v.  Cobb,  165  Mass. 
503,  43  N.  E.  497;  Reddick  v.  Jones,  28  N.  C.  (6  Ired.  Law)  107,  44  Am.  Dec. 
68;  Dunham  v.  Peterson,  5  N.  D.  414,  57  Am.  St.  Rep.  556,  36  L.  R.  A. 
232;  Red  River  Valley  Nat.  Bank  v.  North  Star  Boot  &  Shoe  Co.,  8  N. 

D.  432,  79  N.  W.  880;  Knox  v.  Clifford,  38  Wis.  651;  Wilkie  v.  Chandon, 
1  Wash.  355. 

28  Coddington  v.  Bay,  20  Johns.  (N.  Y.)  637,  11  Am.  Dec.  342;  Comstock 
V.  Hier,  7i  N.  Y.  269,  29  Am.  Rep.  142;  Benjamin  v.  Rogers,  126  N.  Y. 
60,  26  N.  E.  970;  King  v.  Doolittle,  38  Tenn.  (1  Head)  77;  Ferress  v. 
Tavel,  87  Tenn.  386,  11  S.  W.  93,  3  L.  R.  A.  414. 

Opp. — Sel. — 7 


98  CONSIDERATION.  §  G2 

ment  extended.^^  That  recovery  on  the  instrument  might  extin- 
guish the  claim  is  not  sufficient,  there  being  nothing  to  show  that 
in  case  of  failure  to  recover  the  debt  would  still  be  extinguished.^ 
The  rule  as  here  laid  down  is  believed  to  be  erroneous  and  to 
arise  from  a  failure  to  consider  those  sections  of  the  act  which 
provide  that  ''where  a  holder  has  a  lien  on  the  instrument,  aris- 
ing either  from  contract  or  by  implication  of  law,  he  is  deemed  a 
holder  for  value,  to  the  extent  of  his  lien,  "^^  and,  in  some  cases, 
that  value  is  any  consideration  sufficient  to  support  a  simple  con- 
tract.^- The  true  rule,  under  the  negotiable  instruments  act, 
would  seem  to  be  that  a  person  holding  a  note  as  collateral  se- 
turitj'  for  a  pre-existing  debt  is  a  holder  for  value  to  the  extent 
of  the  amount  due  him.^^  Of  course  this  rule  limits  the  amount 
of  the  recovery  to  the  amount  of  the  debt  secured,^'*  except  where 
the  instrument  is  in  the  hands  of  a  bona  fide  holder,^^  in  which 

29  Harris  v.  Fowler,  59  Misc.  523,  110  N.  Y.  Supp.  987;  Sutherland  v. 
Mead,  80  App.  Div.  103,  80  N.  Y.  Supp.  504.  Note  to  secure  pre-existing 
debt  not  enforcible  against  accommodation  indorser  unless  taken  in  pay- 
ment of  debt  or  time  of  payment  thereof  extended.  Roseman  v.  Ma- 
hony,  86  App.  Div.  Zll ,  83  N.  Y.  Supp.  749.  The  holder  of  the  note  must 
give  up  the  debt  wholly  or  qualifiedly  in  order  to  constitute  considera- 
tion.    Id. 

30  Harris  v.  Fowler,  59  Misc.  523,  110  N.  Y.  Supp.  987;  Commercial 
Nat.  Bank  v.  Citizens'  State  Bank,  132  Iowa,  706,  109  N.  W.  198. 

31  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or., 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  27);  Ariz.  (§  3330);  III. 
(§  27);  Kan.  (§  34);  Md.  (§  46);  Mich.  (§  29);  Neb.  (§  27);  N.  Y.  (§  53); 
Ohio  (§  3171  z);  R.  I.  (§  35);  Wis.  (§  1675-53). 

32  In  re  Hopper-Morgan  Co.,  154  Fed.  249.    See  ante,  §  60. 

33  Brooks  V.  Sullivan,  129  N.  C.  190,  39  S.  E.  822;  Graham  v.  Smith 
(Mich.)  15  Det.  Leg.  N.  923,  118  N.  W.  726;  Brewster  v.  Shrader,  26  Misc. 
480,  57  N.  Y.  Supp.  606.  This  view  of  the  law  changes  the  rule  in  all  of 
these  states. 

34  Hatcher  v.  Independence  Nat.  Bank,  79  Ga.  547,  5  S.  E.  Ill;  Handy 
V.  Sibley,  46  Ohio  St.  9,  17  N.  E.  329;  Winship  v.  Merchants'  Nat.  Bank, 
42  Ark.  22. 

The  rule  applies  to  accommodation  paper.  Continental  Nat.  Bank  v. 
Bell,  125  N.  Y.  38,  25  N.  E.  1070;  Handy  v.  Sibley,  46  Ohio  St.  9,  17  N. 
E.  329. 

35  See  In  re  Hopper-Morgan  Co.,  154  Fed.  249.  See,  also,  post,  chapter 
XL 


§  G4  WANT    OF    CONSIDERATION.  .  99 

case  there  would  seem  to  be  a  liability  to  account  for  the  surplus 
to  the  debtor.^^ 

Effect  of  Want  or  Failure  of  Consideration. 

§  63.  Absence  or  failure  of  consideration  is  a  matter  of  defense 
as  against  any  person  not  a  holder  in  due  course,  and  par- 
tial failure  of  consideration  is  a  defense  pro  tanto,  whether 
the  failure  is  an  ascertained  and  liquidated  amount  or 
otherwise. 

§  64.  In  the  absence  of  fraud,  mere  inadequacy  of  consideration 
is  no  defense. 

Effect  of  want  or  failure  of  consideration. 

Under  the  negotiable  instruments  act,  as  well  as  under  the  law 
merchant,  want  ^"^  or  failure  ^^  may  be  shown  as  between  the  orig- 
inal parties  or  against  one  not  a  bona  fide  holder.^^     Under  the 

36  Camden  Nat.  Bank  v.  Fries-Breslin  Co,  214  Pa.  395,  63  Atl.  1022. 
87  Litchfield  Bank  v.  Peck,  29  Conn.  384;  Radcliffe  v.  Biles,  94  Ga.  480, 

20  S.  E.  359;  Beall  v.  Pearre,  12  Md.  550;  Hill  v.  Buckminister,  22  Mass. 
(5  Pick.)  391;  Slade  v.  Halstead,  7  Cow.  (N.  Y.)  322;  Southerland  v. 
W'hitaker,  50  N.  C.  (5  Jones  Law)   5;  Knowles  v.  Knowles,  128  111.  110, 

21  Nu  E.  196. 

38  Hawks  V.  Truesdell,  94  Mass.  (12  Allen)  564;  Bookstaver  v.  Jayne, 
60  N.  Y.  146;  Washburn  v.  Picot,  14  N.  C.  (3  Dev.)  390,  24  Am.  Dec.  266. 

39  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Old.,  Or., 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  28);  Ariz.  (§  3331);  111. 
(§  28);  Kan.  (§  35);  Md.  (§  47);  Mich.  (§  30);  Neb.  (§  28);  N.  Y.  (§  54); 
Ohio  (§  3172);  R.  I.  (§  36);  Wis.  (§  1675-54). 

Battemen  v.  Butcher,  95  App.  Div.  213,  88  N.  Y.  Supp.  685;  Weiss 
V.  Rieser,  62  Misc.  292,  114  N.  Y.  Supp.  983;  City  Deposit  Bank  v.  Green, 
138  Iowa,  156,  115  N.  W.  893;  St.  Paul's  Episcopal  Church  v.  Fields,  81 
Conn.  670,  72  Atl.  145.  The  act  makes  no  change  in  the  rule  that 
parol  evidence  is  admissible  to  show  want  of  consideration  and  the  like. 
People's  Nat.  Bank  v.  Schepflin,  72,  N.  J.  Law,  29,  62  Atl.  333.  In  a  suit 
between  maker  and  payee  on  a  purchase-money  note,  the  maker  may 
defeat  or  limit  the  amount  of  recovery  thereon  by  proving,  in  the  one  case, 


100  CONSIDERATION.  §  64 

law  merchant,  a  partial  failure  may  be  shown  as  a  defense  pro 
tanto,  if  it  is  of  a  definite  or  liquidated  amount  of  the  whole  con- 
sideration.*°  The  negotiable  instruments  laws,  by  providing  that 
the  absence  or  failure  of  consideration  is  matter  of  defense  as 
against  any  person  not  a  holder  in  due  course,  and  that  a  partial 
failure  of  consideration  is  a  defense  pro  tanto,  "whether  the  fail- 
ure is  an  ascertained  and  liquidated  amount  or  otherwise,"  *i 
have  advanced  somewhat  beyond  the  rule  of  the  law  merchant. 
In  this  connection  it  must  be  remembered  that,  since  a  person  who 
obtains  possession  of  an  instrument  improperly  or  irregularly,  for 
example,  one  who  obtains  possession  of  an  instrument  payable  on 
demand  which  has  been  negotiated  an  unreasonable  time  after  its 
issuance,  is  not  a  holder  in  due  course,^^  the  defense  of  want  or 

a  total  unexcused  nonperformance  on  the  part  of  the  vendor  of  his  con- 
tract to  deliver  the  property,  or  loss,  on  the  part  of  the  vendee,  of  the 
benefit  of  the  contract,  occasioned  by  want  of  title  in  the  vendor,  and, 
in  the  other,  refusal  of  the  vendee  to  accept  the  property,  and  notice  of 
his  intention  not  to  do  so,  given  before  the  title  passed;  all  on  the  theory 
of  failure  of  consideration  in  whole  or  in  part.  Acme  Food  Co.  v.  Older 
(W.  Va.)  61  S.  E.  235. 

A  promissory  note  given  to  a  near  relative  by  a  person  in  declining 
years,  by  way  of  compensation  or  reward  for  services  rendered  and  to 
be  rendered,  is  so  much  in  the  nature  of  a  testamentary  disposition  of 
the  property  that  ordinarily  the  maker's  estimate  of  the  value  of  the  serv- 
ices will  not  be  disturbed  on  the  ground  of  disparity  between  the  actual 
value  thereof  and  the  amount  of  the  note.  Bade  v.  Feay,  63  W.  Va.  166, 
61  S.  E,  348.  That  such  a  note  so  given  calls  for  a  larger  sum 'than  the 
services  were  probably  worth  does  not  invalidate  it  on  the  ground  of 
fraud  or  failure  of  consideration.     Id. 

40Pulsifer  v.  Hotchkiss,  12  Conn.  234;  Allen  v.  Bank  of  U.  S.,  20  N.  J. 
Law,  620;  Payne  v.  Cutler,  13  Wend.  (N.  Y.)  60S.  In  some  cases  it  has 
been  held  that  a  partial  unliquidated  failure  of  consideration  may  be 
shown  as  between  the  original  parties,  in  mitigation  of  damages.  Davis 
v.  Wait,  12  Or.  425,  8  Pac.  356;  Christy  v.  Ogle,  33  111.  295.  And  see 
Beall  V.  Pearre,  12  Md.  550. 

^1  Same  sections  negotiable  instruments  law  as  last  above  cited. 

This  aflirms  the  rule  existing  in  Oregon.  Davis  v.  Wait,  12  Or.  425. 
See,  also,  Edwards  v.  Porter,  42  Tenn.  (2  Cold.)  42.  It  changes  the  rule 
in  North  Carolina.  See  Evans  v.  Williamson,  79  N.  C.  86;  Washburn 
V.  Picot,  3  Dev.  (N.  C.)  390. 

42  Neg.    Inst.   Laws    Colo.,   Conn.,   D.    C,    Fla.,   Idaho,   Iowa,    Ky.,    La.. 


§  66  ACCOMMODATION  PAPER.  101 

failure  of  consideration  is  good  as  against  him.  A  note  wholly 
without  consideration  is  not  evidence  of  any  indebtedness  be- 
tween the  original  parties/^  but  equity  will  not  grant  relief  on 
the  ground  of  a  want  of  consideration,  unless  there  is  danger 
that  the  instrument  may  be  held  outstanding  until  evidence  of 
want  of  consideration  cannot  be  produced  in  an  action  at  law.** 
The  right  to  set  up  the  defense  of  want  or  failure  of  consideration 
may  be  lost  by  acts  or  omissions  amounting  in  law  to  a  waiver  or 
to  an  estoppel.*^ 

Inadequacy  of  consideration. 

Mere  inadequacy  of  consideration,  without  fraud,  is  no  de- 
fense,*^ unless  the  inadequacy  is  so  great  as  to  be  itself  a  badge 
of  fraud.*7 

Accommodation  Paper. 

§  65.  An  accommodation  party  is  one  who  has  signed  the  in- 
strument as  maker,  drawer,  acceptor  or  indorser,  without 
receiving  value  therefor,  and  for  the  purpose  of  lending 
his  name  to  some  other  person. 

§  66.  An  accommodation  party  is  liable  on  the  instrument  to  a 
holder  for  value,  notwithstanding  such  holder  at  the  time 
of  taking  the  instrument  knew  him  to  be  only  an  accom- 
modation party. 

Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Ok!.,  Or., 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  53);  Ariz.  (§  3356);  111' 
(§  53);  Kan.  (§  60);  Md.  (§  11);  Mich.  (§  55);  Neb.  (§  53);  N.  Y  (§  92); 
Ohio  (§  3172y);  R.  I.  (§  61);  Wis.  (§  1676-23). 

43  Hildeburn  v.  Curran,  65  Pa.  59. 

44  Metler's  Adm'rs  v.  Metier,  18  N.  J.  Eq.  270. 

45  McCreary  v.  Parsons,  31  Kan.  447;  Howard  v.  Palmer,  64  Me  86; 
Edison  General  Elec.  Co.  v.  Blount,  96  Ga.  272,  23  S.  E.  306;  Morrill  v. 
Prescott,  64  N.'  H.  505,  15  Atl.  123;  Horton  v.  Arnold,  18  Wis.  223.  See, 
also,  Longmire  v.  Fain,  89  Tenn.  393,  18  S.  W.  70. 

46  Lewis  V.  Woodfolk,  61  Tenn.  (2  Baxt.)  25;  Boggs  v.  Wann  58  Fed 
681. 

47  Jones  V.  Degge,  84  Va.  685,  5  S.  E.  799. 


102  CONSIDERATION.  §  66 

Accommodation  paper. 

An  accommodation  bill  or  note  within  the  law  merchant  is  one 
made,  accepted,  or  indorsed  without  consideration,  to  enable  the 
payee  or  holder  to  obtain  money  or  credit  on  the  strength  of  the 
name  of  the  maker,  acceptor,  or  indorser.*^  The  negotiable  in- 
struments laws  define  accommodation  paper  in  practically  the 
same  language,*^  and  hence  a  consideration  moving  to  accommo- 
dation maker  is  necessary  to  uphold  his  promise.^'^  "Whether  a 
signature  was  placed  on  negotiable  paper  for  the  purpose  of  ac- 
commodation must  be  determined  ordinarily  from  the  circum- 
stances of  each  particular  case,^^  and  parol  evidence  is  admissible 
to  show  both  the  accommodation  character  of  the  signature  and 

*8  Pollard  V.  Hufif,  44  Neb.  892,  63  N.  W.  58;  Jefiferson  County  v.  Burl- 
ington &  M.  R.  Co.,  66  Iowa,  385,  16  N.  W.  561,  23  N.  W.  899,  citing  1 
Daniel,  Negotiable  Inst.  §  189.  Credit  given  maker  of  note  is  a  suffi- 
cient consideration  to  bind  accommodation  indorser.  Bank  of  Morgan 
City  V.  Herwig,  121  La.  513,  46  So.  611.  Where  notes  were  indorsed  as 
an  accommodation  and  accepted  by  the  payee  to  secure  a  debt,  the  notes 
ire  not  taken  out  of  the  category  of  ordinary  commercial  paper.     Id. 

*9Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or., 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  29);  Ariz.  (§  3332);  111. 
'§29);  Kan.  (§  36);  Md.  (§  48);  Mich.  (§  31);  Neb.  (§  29);  N.  Y.  (§  55); 
Ohio  (§  3172  a);  R.  I.  (§  37);  Wis.  (§  1675-55). 

In  the  negotiable  instruments  law  as  first  adopted  in  New  York  the 
Iieadline  to  this  section  read,  "Liability  of  accommodation  indorser,"  but 
the  word  "indorser"  was  changed  to  "party"  by  amendment.  Laws  1898, 
c.  336,  §  22. 

50  Marling  v.  Jones,  138  Wis.  82,  119  N.  W.  931. 

51  The  following  recent  cases  decide  whether  certain  paper  was  or  was 
not  accommodation  paper:  Messmore  v.  Meyer,  56  N.  J.  Law,  31,  27 
Atl.  938;  Capital  City  State  Bank  v.  Des  Moines  Cotton-Mill  Co.,  84  Iowa, 
561,  51  N.  W.  33;  Lockwood  v.  Twitchell,  146  Mass.  623,  16  N.  E.  728; 
Adams  v.  Kennedy,  175  Pa.  160. 

Indorsements  in  the  following  cases  were  held  to  be  for  accommo- 
dation: National  Bank  of  Commerce  v.  Atkinson,  55  Fed.  465;  Aetna 
Nat.  Bank  v.  Charter  Oak  Life  Ins.  Co.,  50  Conn.  167;  Robertson  v.  Row- 
cll,  158  Mass.  94,  32  N.  E.  898,  35  Am.  St.  Rep.  466;  Fox  v.  Rural  Home 
Co.,  90  Hun,  365,  25  N.  Y.  Supp.  896;  Newbold  v.  Boraef,  155  Pa.  227,  26 
Atl.  305. 


§  66  ACCOMMODATION   PAPER.  103 

the  party  accommodated,^"^  but  the  rule  must  be  carefully  ap- 
plied so  as  not  to  defeat  the  purpose  and  effect  of  written  in- 
struments, and  such  parol  contract  must  be  established  by  clear, 
precise  and  indubitable  evidence.^^  Irregular  signatures  may  be 
presumed  to  be  accommodation  in  character.^*  A  note  made  to 
enable  the  payee  to  raise  money  on  the  credit  of  the  signer's 
name  will  not  be  presumed  to  be  accommodation  paper,  if  the 
maker  was  indebted  to  the  payee  on  open  accoimt,  in  an  amount 
equal  to  the  face  of  the  note.^s  Nor  does  the  making  and  deliver- 
ing of  one  note  in  exchange  for  another  constitute  either  of  the 
instruments  accommodation  paper,  though  the  exchange  was  mut- 
ually convenient  to  the  parties.^^  The  original  payee  of  paper  ex- 
ecuted for  his  benefit  and  accommodation  cannot  recover  thereon 

52  Indorser.  Haddock,  Blanchard  &  Co.  v.  Haddock,  192  N.  Y.  499,  85 
N.  E.  682,  afg.  118  App.  Div.  412,  103  N.  Y.  Supp.  584.  This  is  not  al- 
tered by  the  fact  that  §  114  does  not  expressly  state  that,  if  the  indorser 
signed  for  the  accommodation  of  the  acceptor,  he  is  liable  to  all  parties 
subsequent  to  the  acceptor.     Id. 

53  Lebanon  Nat.  Bank  v.  Long,  220  Pa.  556,  69  Atl.  1033. 

54  Where  a  note  is  taken  from  the  payee  in  payment  of  a  debt  due  from 
him,  indorsed  by  a  third  person,  the  indorsement  is  prima  facie  an  ac- 
commodation indorsement,  and  the  person  who  takes  it  is  chargeable 
with  knowledge  that  the  indorsement  is  an  accommodation  indorsement. 
Brill  Co.  V.  Norton  &  Tanton  St.  R.  Co.,  189  Mass.  431,  75  N.  E.  1090, 
2  L.  R.  A.  (N.  S.)  525.  Where  the  maker  presents  for  discount  paper 
payable  to  his  own  order,  and  indorsed  by  another,  the  latter  is  presumed 
to  be  an  accommodation  indorser.  Stall  v.  Catskill  Bank,  18  Wend. 
(N.  Y.)  466;  Erwin  v.  Shaffer,  9  Ohio  St.  43,  72  Am.  Dec.  613;  Overton 
v.  Hardin,  46  Tenn.  (6  Cold.)  375.  See,  also,  further,  on  the  question 
of  presumption  and  burden  of  proof.  Clay  City  Nat.  Bank  v.  Halsey,  17 
C.  C.  A.  222,  70  Fed.  567;  First  Nat.  Bank  v.  Alton,  60  Conn.  402,  22  Atl. 
1010;  Conselyea  v.  Swift,  103  N.  Y.  604,  9  N.  E.  489;  National  Bank  v. 
Bradley,  117  N.  C.  526,  23  S.  E.  455;  Murphy  v.  Gumaer,  12  Colo.  App. 
951,  55  Pac.  951.  Where  the  party  primarily  liable  on  a  note  or  draft 
presents  the  same  for  discount  with  the  name  of  the  indorser  or  drawer 
thereon,  the  transaction  on  its  face  shows  that  the  indorser  or  drawer 
is  a  mere  accommodation  party,  and  the  party  receiving  such  paper  is 
chargeable  with  notice  of  its  accommodation  character.  Cook  v.  Amer- 
ican Tubing  &  Webbing  Co.,  28  R.  I.  41,  65  Atl.  641,  9  L.  R.  A.  (N.  S.)  193. 

55  Long  V.  Gieriet,  57  Minn.  278,  59  N.  W.  194. 


104  CONSIDERATION.  §  G6 

against  the  accommodation  maker, ^^  for  accommodation  paper  has 
no  validity  until  it  has  been  discounted  or  has  passed  into  the 
hands  of  a  holder  for  value.^^  Until  such  discounting  or  transfer 
takes  place,  the  maker  may  withdraw  from  and  rescind  his  en- 
gagement,^^ but  an  accommodation  maker  compelled  to  pay  the 
note  may  sue  the  accommodated  parties  to  recover  the  amount 
paid  and  interest,^*'  though,  it  should  be  noted,  such  suit  is  not  one 
based  on  the  note.^^ 

An  accommodation  party  is  liable  on  the  instrument  to  a  holder 
for  value,  notwithstanding  such  holder  at  the  time  of  taking  the 
instrument  knew  him  to  be  only  an  accommodation  party ,^^  but 
this  rule  does  not  obtain  when  the  accommodation  party  has  no 

56  Farber  v.  National  Forge  &  I.  Co.,  140  Ind.  54,  39  N.  E.  249;  Wil- 
liams V.  Banks,  11  Md.  198;  Whittier  v.  Eager,  83  Mass.  (1  Allen)  499; 
Rice  V.  Grange,  131  N.  Y.  149,  30  N.  E.  46. 

See,  also,  supra,  note  22. 

57  More  V.  Maddock,  33  Mo.  575;  Coghlin  v.  May,  17  Cal.  515. 

58  Second  Nat.  Bank  v.  Howe,  40  Minn.  390,  42  N.  W.  200,  12  Am.  St. 
Rep.  744;  Tufts  v.  Shepherd,  49  Me.  312;  Macy  v.  Kendall,  33  Mo.  164; 
Smith's  Ex'rs  v.  Wyckoff,  3  Sandf.  Ch.  (N.  Y.)  77. 

59  Second  Nat.  Bank  v.  Howe,  40  Minn.  390,  42  N.  W.  200,  12  Am.  St. 
Rep.  744;  Downes  v.  Richardson,  5  Barn.  &  Aid.  674;  Whitworth  v.  Ad- 
ams, 5  Rand.  (Va.)  342;  Berkeley  v.  Tinsley,  88  Va.  1001,  14  S.  E.  842. 

60  Morgan  v.  Thompson,  72  N.  J.  Law,  244,  62  Atl.  410. 

61  Morgan  v.  Thompson,  72  N.  J.  Law,  244,  62  Atl.  410. 

62  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or., 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  29);  Ariz.  (§  3332);  111. 
(§  29);  Kan.  (§  36);  Md.  (§  48);  Mich.  (§  31);  Neb.  (§  29);  N.  Y.  (§  55); 
Ohio  (§  3172  a);  R.  L  (§  37);  Wis.  (§  1675-55). 

White  V.  Savage,  48  Or.  604,  87  Pac.  1040;  Wolstenholme  v.  Smith,  34 
Utah,  300,  97  Pac.  329;  Citizens'  Nat.  Bank  v.  Lilienthal,  40  App.  Div.  609, 
57  N.  Y.  Supp.  567;  Packard  v.  Windholz,  88  App.  Div.  365,  84  N.  Y. 
Supp.  666;  Lowell  v.  Bickford,  201  Mass.  543,  88  N.  E.  1.  The  fact  that  an 
indorsee  for  value  knew  that  the  note  was  an  accommodation  note  be- 
tween the  original  parties  is  not  a  defense  to  an  action  by  him  on  the 
noite.     Black  v.  First  Nat.  Bank,  96  Md.  399,  54  Atl.  88. 

This  accords  with  law  merchant.  Hodges  v.  Nash,  43  111.  App.  638; 
Tourtelot  v.  Reed,  62  Minn.  384,  64  N.  W.  928;  Maitland  v.  Citizens'  Nat. 
Bank,  40  Md.  540,  17  Am.  Rep.  620;  Holland  Trust  Co.  v.  Waddell,  75 
Hun,  104,  26  N.  Y.  Supp.  980. 


/ 


§66  ACCOMMODATION   PAPER.  105 

authority  to  enter  into  such  an  agreement,^^  and  in  the  latter  case 
the  burden  is  on  the  holder  to  prove  that  he  is  a  holder  for  value 
and  without  knowledge  of  the  accommodation  character  of  such 
party's  signature.^*  It  should  be  noted  that  the  liability  of  the 
accommodation  party,  as  here  stated,  is  not  limited  to  a  "holder 
in  due  course,"  but  is  to  a  "holder  for  value, "^^  and  this  rule  has 
been  applied  to  accommodation  paper  shown  to  have  been  ap- 
propriated by  the  accommodated  party  to  some  purpose  other 
than  that  for  which  it  was  given.^^ 

The  act  is  not  deemed  to  change  pre-existing  laws  as  to  whom 
may  become  accommodation  parties.^''  As  a  general  rule  cor- 
porations cannot  become  accommodation  indorsers.^^ 

63  Manufacturing  corporation.  National  Bank  of  Newport  v.  Snyder 
Mfg.  Co.,  117  App.  Div.  370,  102  N.  Y.  Supp.  478;  Brill  Co.  v.  Norton  & 
Tanton  St.  R.  Co.,  189  Mass.  431,  75  N.  E.  1090,  2  L.  R.  A.  (N.  S.)  525. 

64  National  Bank  of  Newport  v.  Snyder  Mfg.  Co.,  117  App.  Div.  370,  102 
N.  Y.  Supp.  478. 

65Mersick  v.  Alderman,  11  Conn.  634,  60  Atl.  109;  Marling  v.  Jones,  138 
Wis.  82,  119  N.  W.  931.  Rule  applied  in  favor  of  one  taking  demand  note 
as  collateral  for  pre-existing  debt.  Lowell  v.  Bickford,  201  Mass.  543, 
88  N.  E.  1. 

66  Mersick  v.  Alderman,  11  Conn.  634,  60  Atl.  109. 

67  The  act  does  not  change  the  statutory  law  of  New  Jersey  rendering 
invalid  a  promissory  note  executed  by  a  married  woman  for  the  accom- 
modation of  another.  People's  National  Bank  v.  Schepflin,  1Z  N.  J.  Law, 
29,  62  Atl.  333.  Married  woman  may  become  bound  as  accommodation 
indorser  of  note,  made  by  partnership  of  which  husband  was  a  member 
and  business  manager  and  payable  to  her  husband.  Case  does  not  seem 
to  be  lim.ited  to  particular  facts.  This  accords  with  former  rule  in  state. 
Middleborough  Nat.  Bank  v.  Cole,  191  Mass.  168,  11  N.  E.  781. 

68  Fox  V.  Rural  Home  Co.,  90  Hun,  365,  35  N.  Y.  Supp.  896;  Aetna  Nat. 
Bank  v.  Charter  Oak  Life  Ins.  Co.,  50  Conn.  167;  Hall  v.  Auburn  Turn- 
pike Co.,  27  Cal.  255,  87  Am.  Dec.  75.  Manufacturing  corporation  has 
no  power  to  become  accommodation  indorser.  National  Bank  of  New- 
port V.  Snyder  Mfg.  Co.,  117  App.  Div.  370,  102  N.  Y.  Supp.  327.  A  cor- 
poration organized  to  make  tubing  or  webbing  has  no  power  to  issue  ac- 
com.modation  paper.  Cook  v.  American  Tubing  &  Webbing  Co.,  28  R. 
I.  41,  65  Atl.  641,  9  L.  R.  A.  (N.  SJ  193. 


CHAPTER  VI. 

CONSTRUCTION    AND    OPERATION. 

67.  1.  Ambiguity  as   to  Amount — Words   Control   Figures. 

2.  Interest  Clause. 

3.  Undated  Instruments. 

4.  Conflict  Between  Written  and  Printed  Portions. 

5.  When  Bill  May  be  Treated  as  Promissory  Note. 

6.  Capacity  in  Which  One  Signs  Uncertain. 

7.  Joint  and  Several  Liability. 

8.  Memoranda  on  Instrument. 

9.  Several  Instruments. 

68.  Bill  of  Exchange  Not  an  Assignment. 

69.  Exception: — Bill  on  Particular  Fund. 

70.  Check  Not  an  Assignment. 

In  General. 

67.  Where  the  language  of  the  instrument  is  ambiguous,  or 
there  are  omissions  therein,  the  following  rules  of  con- 
struction apply: 

1.  Where  the  sum  payable  is  expressed  in  words  and 

also  in  figures  and  there  is  a  discrepancy  between 
the  two,  the  sum  denoted  by  the  words  is  the  sura 
payable;  but  if  the  words  are  ambiguous  or  uncer- 
tain, reference  may  be  had  to  the  figures  to  fix  the 
amount ; 

2.  Where  the  instrument  provides  for  the  payment  of 

interest,  without  specifying  the  date  from  which  in- 
terest is  to  run,  the  interest  runs  from  the  date  of 
the  instrument,  and  if  the  instrument  is  undated, 
from  the  issue  thereof; 

3.  "Where  the  instrument  is  not  dated,  it  will  be  consid- 

ered to  be  dated,  as  of  the  time  it  was  issued; 
106 


§  67  AMOUNT    AMBIGUOUS.  107 

4.  Where  there  is  a  conflict  between  the  written  and 

printed  provisions  of  the  instrument,  the  written  pro- 
visions prevail; 

5.  Where  the  drawer  and  drawee  are  the  same  person, 

or  where  the  drav/ee  is  a  fictitious  person,  or  a  per- 
son not  having  capacity  to  contract,  or  where  the 
Instrument  is  so  ambiguous  that  there  is  doubt, 
whether  it  is  a  bill  or  note,  the  holder  may  treat  it 
as  either  at  his  option. 

6.  Where  a  signature  is  so  placed  upon  the  instrument 

that  it  is  not  clear  in  Vv'hat  capacity  the  person  mak- 
ing the  same  intended  to  sign,  he  is  to  be  deemed 
an  indorser; 

7.  Where  an  instrument  containing  the  words  "I  promise 
to  pay"  is  signed  by  two  or  more  persons,  they  are 

deemed  to  be  jointly  and  severally  liable  thereon; 

8.  Memoranda  on  the  instrument  if  made  at  or  before 

delivery  and  are  material  to  the  contract  are  part 
of  the  instrument ; 

9.  Several  instruments  executed  at  or  about  the  same 

time  and  as  parts  of  the  same  transaction  may  be 
construed  together. 

Ambiguity  as  to  amount — Words  control  figures. 

The  general  rule  for  construction  of  contracts,  that  words  con- 
trol figures  in  case  of  a  discrepancy,  applies  to  negotiable  instru- 
ments.^ Thus,  where  marginal  figures  and  the  written  words  ex- 
pressing the  amount  differ,  evidence  that  the  bill  was  negotiated 

1  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or., 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  17);  Ariz.  (§  3320);  111. 
(§  17);  Kan.  (§  24);  Md.  (§  36);  Mich.  (§  19);  Neb.  (§  17);  N.  Y.  (§  36); 
Ohio  (§  3171  p);  R.  I.  (§  25);  Wis.  (§  1675-17). 

See,  also,  Poorman  v.  Mills,  39  Cal.  345,  2  Am.  Rep.  451;  National  Bank 
of  Rockville  v.  Second  Nat.  Bank,  69  Ind.  479. 


108  CONSTRUCTION    AND    OPERATION.  §  67 

for  the  amount  expressed  in  the  figures  is  not  admissible. ^  If, 
however,  the  words  are  ambiguous  and  the  figures  certain,  refer- 
ence may  be  had  to  the  figures  to  fix  the  amount.^  Thus,  where 
the  place  for  the  amount  in  the  body  of  an  instrument  in  the 
form  of  a  note  is  blank,  but  the  word  "dollars"  follows  the  blank, 
and  the  figures  "$147.70"  appear  in  the  margin,  the  figures 
"should  be  taken  as  the  amount  which  the  obligor  intended  to 
obligate  himself  to  pay,  and  the  obligation  enforced  accord- 
ingly."* 

Interest  clause. 

If  a  negotiable  instrument  provides  for  interest,  but  fails  to 
specify  the  date  from  which  the  interest  shall  run,  interest  runs 
from  the  date  of  the  instrument,  if  it  is  dated,  and,  if  it  is  not 
dated,  from  the  time  of  its  issuance.^  The  latter  part  of  the  rule 
is  a  logical  outcome  of  the  rule  that  an  undated  instrument  takes 
date  from  the  time  of  its  issuance.^  Where  a  note  secured  by 
mortgage  is  ambiguous  as  to  the  time  from  which  interest  is  to 

2  Smith  V.  Smith,  1  R.  I.  398,  53  Am.  Dec.  652. 

3  Subdivision  1,  same  sections  of  the  negotiable  instruments  laws  as  last 
above  cited. 

So,  too,  where  the  words  are  illegible  (Riley  v.  Dickens,  19  111.  29),  or 
where  there  are  no  words  expressing  the  amount  (Wittey  v.  Michigan 
Mut.  Life  Ins.  Co.,  123  Ind.  411,  24  N.  E.  141,  18  Am.  St.  Rep.  327,  8  L.- 
R.  A.  365),  or  the  words  are  misspelled  (Burnham  v.  Allen,  67  Mass.  [1 
Gray]  496). 

Option  of  holder  to  treat  ambiguous  instrument  as  bill  or  note,  see  post, 
subd.  5. 

4  Wittey  V.  Michigan  Mut.  Life  Ins.  Co.,  123  Ind.  411,  24  N.  E.  141,  18 
Am.  St.  Rep.  327,  8  L.  R.  A.  365. 

5  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl,  Or., 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  17);  Ariz.  (§  3320);  111. 
(§  117);  Kan.  (§  24);  Md.  (§  36);  Mich.  (§  19);  Neb.  (§  17);  N.  Y.  (§  36); 
Ohio  (§  3171  p);  R.  I.  (§  25);  Wis.  (§  1675-17). 

This  is  declaratory  of  the  law.  See  Salazar  v.  Taylor,  18  Colo.  538, 
33  Pac.  369;  Cambell  P.  P.  &  M.  Co.  v.  Jones,  79  Ala.  475;  Smith  v.  Gdod- 
lett,  92  Tenn.  230,  21  S.  W.  106;  Miller  v.  Cavanaugh,  99  Ky.  377,  35  S. 
W.  920,  59  Am.  St.  Rep.  463. 

6  See  ante,  §  14. 


§  67  WRITTEN    AND    PRINTED    PARTS.  109 

run,  the  uncertainty  is  removed  by  definite  terms  in  the  mort- 
gage.'^ A  note  payable  on  demand  draws  interest  from  date.^  So, 
also,  a  note  not  expressing  any  time  of  payment."  It  is  often  the 
case  that  the  word  "interest"  is  not  used,  but  the  instrument 
will  be  construed  to  be  interest-bearing  if  it  is  clear  from  an  in- 
spection of  it  that  such  was  the  intent  of  the  parties.  Thus,  the 
words  "at  six  per  cent"  mean  interest  at  the  rate  of  six  per 
cent,^°  and  the  words  "at  10  per  cent"  indicate  that  the  instru- 
ment is  interest-bearing.^^  The  word  "use"  is  equivalent  to  "in- 
terest," ^^  and  the  expression  "Int.  @  6'^°  p.  a."  indicates  that 
the  instrument  bears  interest  at  the  rate  of  six  per  cent  per  an- 
num.^2 

Undated — Deemed  dated  as  of  date  of  issuance. 

As  has  been  shown  a  negotiable  instrument  need  not  be  dated  ;^^ 
not  being  dated  it  will  be  considered  dated  as  of  the  time  it  was 
issued.^^ 

Conflict  between  writing  and  printing — Writing  controls. 

Another  general  rule  governing  contracts,  which  applies  to  ne- 
gotiable instruments,  is  that,  in  case  of  a  conflict  between  the  writ- 

7  Stanton  v.  Caffee,  58  Wis.  261,  16  N.  W.  601;  Prichard  v.  Miller,  86 
Ala.  SOO,  5  So.  784. 

8  Packer  v.  Roberts,  40  111.  App.  613;  Gaylord  v.  Van  Loan,  15  Wend. 
(N.  Y.)  308.     But  see  Hunter  v.  Wood,  54  Ala.  71. 

9  Collier  v.  Gray,  1  Tenn.  (1  Overt.)  110;  Husbrook  v.  Wilder,  1  Pin. 
(Wis.)  643. 

lODurant  v.  Murdock,  3  App.  D.  C.  114. 

11  Thompson  v.  HoaglahJ,  65  111.  310. 

i2Cisne  v.  Chidester,  85  111.  523;  McCIellan  v.  Morris,  Kirby  (Conn) 
145. 

iSBelford  v.  Beatty,  145  111.  414,  34  N.  E.  254,  afg.  46  111.  App.  539. 

1*  See  ante,  chapter  III,  §  13. 

15  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or., 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  17);  Ariz.  (§'  3320);  III' 
(§  17);  Kan.  (§  24);  Md.  (§  36);  Mich.  (§  19);  Neb.  (§  17);  N.  Y.  (§  36); 
Ohio  (§  3171  p);  R.  I.  (§  25);  Wis.  (§  1675-17). 

See  ante,  chapter  III,  §  14. 


110  CONSTRUCTION    AND    OPERATION.  §  67 

ten  and  the  printed  portions  of  an  instrument,  the  written  pro- 
visions prevail.^^ 

When  bill  may  be  treated  as  promissory  note. 

Where  the  drawer  and  the  drawee  is  the  same  person,  that  is, 
where  the  drawer  drawls  on  himself,  the  holder  may,  at  his  op- 
tion, treat  the  instrument  as  a  bill  or  as  a  note.^'^  This  rule  is 
well  illustrated  where  the  instrument  was  in  the  form:  "350.00, 
Bloomington,  111,,  April  23,  1891.  Thirty  days  after  date,  pay  to 
the  order  of  E.  D.  Babbitt  three  hundred  and  fifty  dollars,  for 
value  received.  Funk  &  Lackey;"  and  the  court  said:  "The 
firm  drew  bills,  but  did  not  address  them  to  any  third  person  or 
persons,  and  it  is  therefore  to  be  regarded  that  they  were,  in  legal 
effect,  addressed  to  themselves,  as  drawees,  and  the  signature  of 
the  film  to  the  several  bills  bound  the  firm  both  as  drawers  and 
acceptors;"  and  that,  "the  drawers  and  drawees  being  the  same, 
the  bills  are  in  legal  effect  promissory  notes,  and  may  be  treated 
as  such,  or  as  bills,  at  the  holder's  option. "^^ 

He  has  this  option  also  in  case  the  drawee  is  a  fictitious  person, 
or  one  without  capacity  to  contract,^^  and  in  case  the  instrument 

16  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or., 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  17);  Ariz.  (§  3320);  111. 
(§  17);  Kan.  (§  24);  Md.  (§  36);  Mich.  (§  19);  Neb.  (§  17);  N.  Y.  (§  36); 
Ohio  (§  3171  p);  R.  I.  (§  25);  Wis.  (§  1675-17). 

17  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or., 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  130);  Ariz.  (§  3433);  111. 
(§  129);  Kan.  (§  137);  Md.  (§  149);  Mich.  (§  132);  Neb.  (§  129);  N.  Y. 
(§  214);  Ohio  (§  3175  v);  R.  I.  (§  138);  Wis.  (§  1680-D). 

This  is  also  the  rule  of  the  law  merchant.  See  Wardens,  etc.,  of  St. 
James  Church  v.  Moore,  1  Ind.  289;  Hasey  v.  White  Pidgeon  Beet-Sugar 
Co.,  1  Doug.  (Mich.)  193;  McCandlish  v.  Cruger,  2  Bay  (S.  C.)  377.  See, 
also.  Commonwealth  v.  Butterick,  100  Mass.  12;  Burnheisel  v.  Field,  17 
Ind.  609. 

18  Funk  V.  Babbitt,  156  111.  408,  41  N.  E.  166. 

19  Same  sections  of  the  negotiable  instruments  laws  as  last  above  cited. 
See,  also,  Cork  v.  Bacon,  45  Wis.  192,  30  Am.  Rep.  712,  where  it  was 


§67  JOINT  AND  SEVERAL  LIABILITY.  Ill 

is  so  ambiguous  that  there  is  doubt  Avhether  it  is  a  bill  or  a  note."° 

Capacity  uncertain — Deemed  an  indorser. 

Subject  to  the  qualifications  imposed  by  another  section,^!  where 
it  is  not  clear  in  what  capacity  one  signing  an  instrument  in- 
tended to  sign,  he  is  deemed  an  indorser.^- 

Parties — Joint  and  several  liability. 

Where  two  or  more  persons  sign  an  instrument  containing  the 
words  "I  promise  to  pay,"  they  are  jointly  and  severally  liable. 
This  is  the  rule  of  the  law  merchant  -^  and  of  the  negotiable  in- 
held  that  erasing  part  of  the  name  of  a  bank  on  a  check  and  writing  in 
the  name  of  another  bank  did  not  make  the  latter  a  fictitious  drawee. 

20Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or., 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  17);  Ariz.  (§  3320);  111. 
(§  17);  Kan.  (§  24);  Md.  (§  36);  Mich.  (§  19);  Neb.  (§  17);  N.  Y.  (§  36); 
Ohio  (§  3171  p);  R.  L  (§  25);  Wis.  (§  1675-17). 

For  liability  of  drawer  of  instrument  in  form  of  note,  but  addressed  to 
and  accepted  by,  a  third  person,  see  Funk  v.  Babbitt,  156  111.  408,  41  N. 
E.  166. 

2iNeg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or., 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  63);  Ariz.  (§  3366);  111. 
(§  63);  Kan.  (§  70);  Md.  (§  82);  Mich.  (§  65);  Neb.  (§63);  N.  Y.  (§  113); 
Ohio  (§  3173  h);  R.  I.  (§  71);  Wis.   (§  1677-3). 

22  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or., 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  17);  Ariz.  (§  3320);  111. 
(§  17);  Kan.  (§  24);  Md.  (§  36);  Mich.  (§  19);  Neb.  (§  17);  N.  Y.  (§  36); 
Ohio  (§  3171  p);  R.  I.  (§  25);  Wis.  (§  1675-17). 

Spencer  v.  Alki  Point  Transp.  Co.,  53  Wash.  77,  101  Pac.  509;  Bank  of 
Montpelier  v.   Montpelier  Lumber  Co.   (Idaho)    102  Pac.  685. 

For  full  discussion  of  these  sections  and  of  cases,  see  post,  chapter  XI, 
§  154. 

23  Monson  v.  Drakeley,  40  Conn.  552,  16  Am.  Rep.  74;  Hemmenway  v. 
Stone,  7  Mass.  58,  5  Am.  Dec.  27;  Partridge  v.  Colby,  19  Barb.  (N.  Y.) 
?.4R-  ^-h,^ckle  v.  Templeton,  65  Vt.  205,  25  Atl.  1095;  Dill  v.  White,  52 
Wis.  456. 


112  CONSTRUCTION  AND  OPERATION.  §  67 

struments  laws.-^  Such  expressions  as  "I  or  we  promise  to  pay,"  ^5 
or  *'We  or  either  of  us  promise  to  pay,"26  also  create  a  joint 
and  several  liability  in  case  more  than  one  sign.  A  note  signed 
by  two,  and  containing  the  words  "We  promise  to  pay,"  is  the 
simplest  illustration  of  an  instrument  creating  merely  a  joint  lia- 
bility.27 

Memoranda  made  before  delivery  are  part  of  contract. 

Memoranda  on  the  face  or  back  of  the  instrument,  whether 
signed  or  not,  if  made  at  the  time  of  delivery  and  material  to  the 
contract,  are  part  of  the  instrument,  and  parol  evidence  is  ad- 
missible to  show  the  circumstances  under  which  they  were  made. 
This  is  a  generally  accepted  rule  of  the  law  merchant,^^  and  has 
been  expressly  incorporated  into  the  negotiable  instruments  law 
in  ■Wisconsin,29  and  impliedly  into  that  of  other  states  by  the 
section  providing  that  in  any  case  not  provided  for  in  the  act  the 
rules  of  the  law  merchant  shall  govern.^o 

Several  instruments  may  be  construed  together. 

The  Wisconsin  negotiable  instruments  law  has  expressly  added 
another  general  rule  of  construction  not  expressly  found  in  the 

24Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Old.,  Or., 
Pa  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  17);  Ariz.  (§  3320);  111. 
(§  17);  Kan.  (§  24);  Md.  (§  36);  Mich.  (§  19);  Neb.  (§  17);  N.  Y.  (§  36); 
Ohio  (§  3171  p);  R.  I.  (§  25);  Wis.  (§  1675-17). 

25  Harris  v.  Coleman  &  A.  White  Lead  Co.,  58  111.  App.  366. 

26  Pogue  V.  Clark,  25  111.  295.     But  see  Harvey  v.  Irvine,  11  Iowa,  82. 

27  Barnett  v.  Juday,  38  Ind.  86. 

28  Van  Zandt  v.  Hopkins,  151  111.  248,  37  N.  E.  845;  Specht  v.  Berndorf, 
56  Neb.  553,  76  N.  W.  1059,  42  L.  R.  A.  429;  Seymour  v.  Farquhar,  93 
Ala.  292,  8  So.  466;  Franklin  Sav  Inst.  v.  Reed,  125  Mass.  365;  Barnard  v. 
Cushing,  45  Mass.  (4  Mete.)  230,  38  Am.  Dec.  362;  Blake  v.  Coleman,  22 
Wis.  415,  99  Am.  Dec.  53.     But  see  Howry  v.  Eppinger,  34  Mich.  30. 

29  Section  1675-10. 

soNeg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or., 
Pa  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  196);  Ariz.  (§  3491);  111. 
(§  195);  Kan.  (§  7);  Md.  (§  19);  Mich.  (§  2);  Neb.  (§  194);  N.  Y.  (§  7); 
Ohio  (§  3178  e);  R.  I.  (§  7);  Wis.  (§  1675). 


§  63  BILL    AS    AN    ASSIGNMENT.  113 

law  as  adopted  in  other  states,  though  impliedly  incorporated 
therein  by  the  provision  making  the  rules  of  the  law  merchant 
controlling  in  cases  unprovided  for.^i  It  is  to  the  effect  that 
where  several  writings  are  executed  at  or  about  the  same  time, 
as  parts  of  the  same  transaction,  intended  to  accomplish  the  same 
object,  they  may  be  construed  together  as  one  instrument  as  to 
all  parties  having  notice  thereof.^  Under  this  rule,  as  to  one  not 
a  bona  fide  holder,  a  contemporaneous  written  agreement  may  be 
shown  to  be  part  of  the  contract.^^  A  note  and  the  mortgage  se- 
curing it  are  to  be  construed  together  as  one  instrument.^* 

Effect  of  an  Instrument  as  an  Assignment. 

§  68.  A  bill  of  exchange  of  itself  does  not  operate  as  an  assign- 
ment of  the  funds  in  the  hands  of  the  drawer  available 
for  the  payment  thereof,  and  the  drawee  is  not  liable  on 
the  bill  unless  and  until  he  accepts  the  same, 

31  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,'  Or.,' 
Pa.,  Tenn..  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  196);  Ariz.  (§  3491);  111'. 
(§  195);  Kan.  (§  7);  Md.  (§  19);  Mich.  (§  2);  Neb.  (§  194);  N.  Y.  (§  7); 
Ohio  (§  3178  e);  R.  I.  (§  7);  Wis.  (§  1675). 

82  Wis.,  subd.  8,  §  1675-17. 

Parts  of  bill  drawn  in  a  set  form  one  bill.     See  §  14. 

83  Wood  V.  Ridgeville  College,  114  Ind.  320,  16  N.  E.  619;  Montgomery 
V.  Hunt,  93  Ga.  438,  21  S.  E.  59;  Carrington  v.  Waflf,  112  N.  C.  ^^115,  16 
S.  E.  1008;  Traders'  Nat.  Bank  v.  Smith  (Tex.  Civ.  App.)  22  S.  W.  1056; 
Reed  v.  Cassatt,  153  Pa.  156,  25  Atl.  1074.  But  see  Coffin  v.  Grand  Rap- 
ids Hydraulic  Co.,  136  N.  Y.  655,  32  N.  E.  1076. 

A  contemporary  written  agreement  between  the  maker  and  the  payee, 
given  as  part  of  the  consideration  of  the  note,  and  modifying  the  time 
of  payment,  may  be  shown  as  between  the  maker  and  a  holder  with  no- 
tice of  the  agreement;  as,  where  the  note  was  payable  13  months  after 
date,  and  the  written  agreement  was  that  it  was  not  to  be  payable  until 
the  payee  sold,  or  caused  to  be  sold,  certain  goods  for  the  maker.  Jacobs 
V.  Mitchell,  46  Ohio  St.  601,  22  N.  E.  768. 

34  Brownlee  v.  Arnold,  60  Mo.  79;  Muzzy  v.  Knight,  8  Kan.  456. 

Opp. — Sel. — 8 


114  CONSTRUCTION   AND   OPERATION.  §  69 

§  69.  Exception. — A  bill  drawn  on  or  payable  out  of  a  par- 
ticular fund  may  operate  as  an  equitable  assignment  in 
toto  or  pro  tanto. 

§  70.  A  check  of  itself  does  not  operate  as  an  assignment  of  any 
part  of  the  funds  to  the  credit  of  the  drawer  with  the 
bank,  and  the  bank  is  not  liable  to  the  holder,  unless  and 
until  it  accepts  or  certifies  the  same. 

Negotiable  bill  does  not  operate  as  assignment — Bill  or  order  on 
particular  fund  does  so  operate. 

A  negotiable  bill  of  exchange  does  not  of  itself  operate  as  an 
assignment  of  funds  in  the  hands  of  the  drawee,  and  the  drawee 
is  not  liable  thereon  until  he  accepts  it.^^  If,  however,  a  bill  is 
drawn  on  a  particular  fund,^^  it  operates  as  an  equitable  assign- 
ment ^''  in  toto  or  pro  tanto,  as  the  case  may  be,  and  the  same 
rule  applies  to  an  order  payable  out  of  a  particular  fund.^^     If 

35Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ki^,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or., 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  127);  Ariz.  (§  3430);  111. 
(§  126);  Kan.  (§  134);  Md.  (§  146);  Mich.  (§  129);  Neb.  (§  126);  N.  Y. 
(§  211);  Ohio  (§  3175  r);  R.  I.  (§  135);  Wis.  (§  1680  a). 

Bosworth  V.  Jacksonville  Nat.  Bank,  64  Fed.  615;  Meldrum  v.  Hender- 
son, 7  Colo.  App.  256,  43  Pac.  148;  Exchange  Bank  v.  Sutton  Bank,  78 
Md.  577,  28  Atl.  563;  Whitney  v.  Eliot  Nat.  Bank,  137  Mass.  351,  50  Am. 
Rep.  316;  Lynch  v.  First  Nat.  Bank,  107  N.  Y.  179,  13  N.  E.  775,  1  Am.  St. 
Rep.  803;  Holbrook  v.  Payne,  151  Mass.  383,  24  N.  E.  210,  21  Am.  St. 
Rep.  456.     But  see  Howell  v.  Boyd  Mfg.  Co.,  116  N.  C.  806,  22  S.  E.  5. 

36  Bills  of  this  kind  are  not  negotiable.     See  ante,  §§  36,  2>1 . 

S7Kahnweiler  v.  Anderson,  78  N.  C.  133;  Robbins  v.  Bacon,  3  Me.  346; 
Ballou  V.  Boland,  14  Hun  (N.  Y.)  355.  But  see  Grammel  v.  Carmer,  55 
Mich,  201,  21  N.  W.  418,  54  Am.  Rep.  363. 

38  Lewis  V.  Berry,  64  Barb.  (N.  Y.)  593;  Lawrence  Nat.  Bank  v.  Ko- 
walsky,  105  Cal.  41,  38  Pac.  517;  Central  Nat.  Bank  v.  Spratlen,  7  Colo. 
App.  430,  43  Pac.  1048;  Lee  v.  Robinson,  15  R.  I.  369;  Shenandoath  Val. 
R.  Co.  V.   Miller,  80  Va.  821. 

Also  where  order  was  against  specific  account  for  work,  labor  and  ma- 
terial. Brill  V.  Tuttle,  81  N.  Y.  454,  37  Am.  Rep.  515;  City  of  Seattle  v, 
Liberman,  9  Wash.  276;  Chistmas  v.  Russell,  81  U.  S.  (14  Wall.)  69,  84, 
20  Law.  Ed.  762;  McDaniel  v.  Maxwell,  21  Or.  202,  27  Pac.  952,  28  Am. 
St.  Rep.  740. 


§70  CHECK  AS  AN  ASSIGNMENT.  115 

the  order  docs  not  designate  the  fund,  an  equitable  assignment 
takes  place  if  it  is  designated  by  a  subsequent  parol  agreement.^' 
Under  this  provision  of  the  negotiable  instruments  law  (that  a 
draft  does  not  operate  as  an  assi2:nmcnt  of  the  fund),  when  con- 
strued with  a  law  providing  that  in  an  action  against  a  savings 
bank  by  a  depositor  the  bank  must  pay  the  fund  into  court  if  it 
is  claimed  by  a  third  person,^"  and  that  a  defendant  against  whom 
an  action  on  contract  or  to  recover  a  chattel  is  brought  may  have 
a  person  who  demands  the  same  thing  substituted  as  defendant,*^ 
a  savings  bank  sued  on  a  draft  cannot  pay  the  amount  into  court 
and  have  a  claimant  of  the  fund  substituted  as  defendant,  because 
the  action  is  not  by  a  depositor,  within  the  meaning  of  the  stat- 
ute, nor  is  it  on  a  contract  with  the  bank,  nor  is  it  one  to  recover 
a  chattel.*2 

Check  does  not  operate  as  assignment. 

The  same  rule  which  applies  to  bills  of  exchange  in  general 
also  applies  to  cheeks,  and  a  check  of  itself  does  not  operate  as 
an  assignment  of  any  part  of  the  funds  to  the  credit  of  the  drawer 
in  the  bank,  and  the  bank  is  not  liable  to  the  holder  unless  it  ac- 
cepts or  certifies  the  check.*^  This  rule  of  the  negotiable  instru- 
ments laws  follows  the  weight  of  authority,**  but  changes  the  law 

39  McDaniel  v.  Maxwell,  21  Or.  202,  27  Pac.  952,  28  Am.  St.  Rep.  740. 
Effect  of  acceptance  of  bill,  see  post,  chapter  VIII. 

40  Laws  N.  Y.  1892,  c.  689,  §  115. 

41  Code  N.  Y.  §  820. 

42  Master  v.  Bowery  Sav.  Bank,  63  N.  Y.  Supp.  964. 

43  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or., 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  189);  Ariz.  (§  3487);  111. 
(§  188);  Kan.  (§  196);  Md.  (§  208);  Mich.  (§  191);  Neb.  (§  188);  N.  Y. 
(§  325);  Ohio  (§  3177  z);  R.  I.  (§  197);  Wi-s.  (§  1684-5). 

Van  Buskirk  v.  State  Bank,  35  Colo.  142,  83  Pac.  778,  117  Am.  St.  Rep. 
182;  Baltimore  &  Ohio  R.  Co.  v.  First  Nat.  Bank,  102  Va.  753,  47  S.  E. 
837;  Libby  Bros.  Glass  Co.  v.  Farmers'  &  Mechanics'  Bank,  220  Pa.  1, 
69  Atl.  280;  Boswell  v.  Citizens'  Sav.  Bank,  123  Ky.  485,  29  Ky.  Law  Rep. 
988,  96  S.  W.  717.  Applies  to  check  payable  to  order  and  transferred  by 
delivery.    Meuer  v.  Phenix  Nat.  Bank,  94  App.  Div.  331,  88  N.  Y.  Supp.  83. 

44  Georgia  Seed  Co.  v.  Talmadge  &  Co.,  96  Ga.  254,  22  S.  E.  1001; 
Colorado   Nat.   Bank  v.  Boettcher,  5   Colo.   185,  40  Am.   Re^    142:   Ex- 


116  CONSTRUCTION   AND   OPERATION.  §70 

in  some  of  the  states.'*^  As  between  the  drawer  and  the  payee 
or  his  transferee,  it  has  heretofore  been  generally  held  that  a 
check  operates  as  an  equitable  assignment/^  and  the  above  rule 
of  the  negotiable  instruments  laws  undoubtedly  means  that,  as 
against  the  bank,  a  check  does  not  operate  as  an  equitable  as- 
signment. "Where,  however,  money  has  been  deposited  in  a  bank 
for  the  benefit  of  the  person  who  afterwards  becomes  payee  of 
a  -check  thereon,  and  the  bank  has  notice  of  his  rights,  the  check 
operates  as  an  equitable  assignment  to  him.*''' 

change  Bank  v.  Sutton  Bank,  78  Md.  577,  28  Atl.  563,  23  L.  R.  A.  173; 
Bank  of  Antigo  v.  Union  Trust  Co.,  149  III.  343,  36  N.  E.  948,  34  L.  R. 
A.  611;  Carr  v.  National  Security  Bank,  107  Mass.  45;  First  Nat.  Bank 
V.  Clark,  134  N.  Y.  368,  32  N.  E.  38,  17  L.  R.  A.  580;  Akin  v.  Jones,  93 
Tenn.  353,  27  S.  W.  669,  42  Am.  St.  Rep.  921,  25  L.  R.  A.  523. 

45  See  Hawes  v.  Blackwell,  107  N.  C.  196,  12  S.  E.  245,  22  Am.  St.  Rep. 
870;  Bell  v.  Alexander,  21  Grat.  (Va.)   1. 

In  several  of  the  states  the  rule  is  different  from  that  of  the  nego- 
tiable instruments  laws.  See  Springfield  Marine  &  Fire  Ins.  Co.  v.  Peck, 
102  111.  265;  Farmers'  Bank  &  T.  Co.  v.  Newland,  97  Ky.  464,  31  S.  W. 
38;  Morrison  v.  McCartney,  30  Mo.  183. 

46  Deener  v.  Brown,  8  D.  C.  (1  MacArthur)  350;  Hawes  v.  Blackwell, 
107  N.  C.  196,  12  S.  E.  245,  22  Am.  St.  Rep.  870;  Pease  v.  Landauer,  63 
Wis.  20,  22  N.  W.  847,  53  Am.  Rep.  247. 

47Van  Allen  v.  American  Nat.  Bank,  3  Lans.  (N.  Y.)  517;  Hemphill 
V.  Yerkes,  132  Pa.  545,  19  Atl.  342,  19  Am.  St.  Rep.  607. 


CHAPTER  VII. 

PRESENTMENT  OF  BILLS  OF  EXCHANGE  FOR 
ACCEPTANCE. 

§  71.  When  Necessary. 

§  72.  When  Excused. 

§  73.  Must  be  Within  Reasonable  Time. 

§  74.  Reasonable  Hour;  Business  Day. 

§  75.  Sunday  or  Holiday. 

§  76.  Where  Time  is  Insufficient. 

§  77.  Place  of  Presentment. 

§  78.  By  Whom  Made. 

§  79.  To  Whom  Made — Drawee  or  His  Agent. 

§  80.  Bill  Addressed  to  Two  or  More  Drawees    Not   Partners. 

§  81.  Drawee  Dead. 

§  82.  Bankruptcy  or  Insolvency  of  Drawee. 

§  83.  Bills  Drawn  in  Sets. 

§  84.  Dishonor  by  Nonacceptance. 

§  85.  Rights  of  Holder  on  Nonacceptance. 

§  86.  Duties  of  Holder  on  Nonacceptance. 

§  87.  Referee  in  Case  of  Need. 

When  Necessary. 

§  71.    Presentment  for  acceptance  must  be  made: 

1.  Where  the  bill  is  payable  after  sight,  or  in  any  other 

case  where  presentment  for  acceptance  is  necessary 
in  order  to  fix  the  maturity  of  the  instrument;  or 

2.  "Where  the  bill  expressly  stipulates  that  it  shall  be  pre- 

sented for  acceptance;  or 

3.  Where  the  bill  is  drawn  payable  elsewhere  than  at  the 

residence  or  place  of  business  of  the  drawee. 

In  no  other  case  is  presentment  for  acceptance  necessary 
in  order  to  render  any  party  to  the  bill  liable. 

Necessity  of  presentment  for  acceptance. 

Where  a  bill  is  payable  after  sight,  it  must  be  presented  for 
acceptance  in  order  to  fix  the  time  of  maturity,  and,  in  all  cases 

117 


118         PRESENTMENT  FOR  ACCEPTANCE.        §  71 

where  the  time  of  maturity  can  be  fixed  only  by  presentment,  a 
presentment  must  be  made.^  Bills  payable  at  sight  fall  within  the 
operation  of  this  rule,^  but  bills  payable  on  demand  or  at  a  cer- 
tain period  after  date  do  not  fall  within  the  rule,  and  it  is  not 
necessary  to  present  them  for  acceptance.^  A  check,  being  a 
bill  payable  on  demand,*  need  not  be  presented  for  acceptance  ^ 
unless  it  contains  an  express  stipulation  to  that  effect,^  but  may,  of 
course,  be  presented  for  certification,  which  is  equivalent  to  ac- 
ceptance.'^ Presentment  for  acceptance  is  necessary  in  case  the 
bill  is  payable  elsewhere  than  at  the  residence  or  place  of  business 
of  the  drawee,^  and  in  case  the  bill  itself  expressly  stipulates  that 
it  shall  be  presented  for  acceptance.^ 

1  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo..  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or., 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  143);  Ariz.  (§  3446);  111. 
(§  142);  Kan.  (§  150);  Md.  (§  162);  Mich.  (§  145);  Neb.  (§  142);  N.  Y. 
(§  240);  Ohio  (§  3176  g);  R.  I.   (§  151);  Wis.   (§   1681). 

Austin  V.  Rodman,  1  Hawks  (N.  C.)  194,  9  Am.  Dec.  630;  Commer- 
cial Bank  v.  Perry,  10  Rob.   (La.)   61,  43  Am.  Dec.  168. 

2Austin  V.  Rodman,  1  Hawks  (N.  C.)  194,  9  Am.  Dec.  630;  Hart  v.  Smith, 
15  Ala.  807,  50  Am.  Dec.  161;  Montelius  v.  Charles,  76  111.  303;  Allen  v. 
Suydam,  20  Wend.  (N.  Y.)  321,  32  Am.  Dec.  555;  Bumont  v.  Pope,  7 
Blackf.   (Ind.)  367. 

STownsley  v.  Sumrall,  27  U.  S.  (2  Pet.)  170,  178,  7  Law.  Ed.  68;  Fall 
River  Union  Bank  v.  Willard,  46  Mass.  (5  Mete.)  216;  Sweet  v.  Switt, 
65  Mich,  90,  31  N.  W.  767;  House  v.  Adams,  48  Pa.  261;  Van  Buskirk 
V.  State  Bank  of  Rocky  Ford,  35  Colo.  142,  83  Pac.  778,  117  Am.  St.  Rep. 
182.     But  see  Allen  v.  Suydam,  20  Wend.  (N.  Y.)  321. 

4  See  ante,  §  9. 

6  Lester  v.  Given,  71  Ky.  (8  Bush.)  357;  Van  Buskirk  v.  State  Bank 
of  Rocky  Ford,  35  Colo.  142,  83  Pac.  778,  117  Am.  St.  Rep.  182.  Indeed, 
strictly  speaking,  there  is  no  such  thing  as  acceptance  of  a  check  in 
the  ordinary  sense  of  the  term.  Van  Buskirk  v.  State  Bank  of  Rocky 
Ford,  35  Colo.  142,  83  Pac.  778,  117  Am.  St.  Rep.  182. 

«Van  Buskirk  v.  State  Bank  of  Rocky  Ford,  35  Colo.  142,  83  Pac.  778, 
117  Am.  St.  Rep.  182. 

VVan  Buskirk  v.  State  Bank  of  Rocky  Ford,  35  Colo.  142,  S3  Pac.  778, 
117  Am.  St.  Rep.  182.     See  post,  §§  108-112. 

8  Subdivision  3,  same  sections  of  negotiable  instruments  laws  as  last 
above  cited. 

9  Subdivision  2,  same  sections  of  negotiable  instruments  laws  as  last 
above  cited. 


§72  WHEN    EXCUSED.  119 

The  occasions  stated  iii  the  act  as  requiring  presentment  for 
acceptance  are  to  be  deemed  exclusive,  for  it  is  expressly  pro- 
vided that  "in  no  other  case  is  presentment  for  acceptance  neces- 
sary in  order  to  render  any  party  to  the  bill  liable."  ^° 


When  Excused. 

§  72.  Presentment  for  acceptance  is  excused  and  a  bill  may  be 
treated  as  dishonored  by  nonacceptance  in  either  of 
the  following  cases: 

1.  Where  the  drawee  is  dead,  or  has  absconded,  or  is  a 

fictitious  person,  or  a  person  not  having  capacity  to 
contract  by  bill; 

2.  Where,  after  the  exercise  of  reasonable  diligence,  pre- 

sentment cannot  be  made; 

3.  Where,  although  presentment  has  been  irregular,  ac- 

ceptance has  been  refused  on  some  other  ground. 

Presentment  for  acceptance  is  excused,  and  the  bill  may  be 
treated  as  dishonored  for  nonacceptance  where  the  drawee  is 
dead,  or  has  absconded,  or  is  a  fictitious  person,  or  a  person  with- 
out capacity  to  execute  the  bill,  or  where,  after  the  exercise  of 
reasonable  diligence,  presentment  cannot  be  made,  or  where  the 
presentment  was  irregular,  but  acceptance  was  refused  on  other 
grounds.^^  Dispensing  with  payment  in  the  case  of  the  drawee's 
death  settles  a  question  upon  which  the  authorities  previously 

lONeg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or., 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  143) ;  Ariz.  (§  3446) ;  111. 
(§  142);  Kan.  (§  150);  Md.  (§  162);  Mich.  (§  145);  Neb.  (§  142);  N.  Y. 
(§  240);  Ohio  (§  3176  g);  R.  I.  (§  151);  Wis.  (§   1681). 

11  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or., 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  148);  Ariz.  (§  3451);  111. 
(§  147);  Kan.  (§  155);  Md.  (§  167);  Mich.  (§  ISO);  Neb.  (§  147);  N.  Y. 
(.§  245);  Ohio  (§  31761);  R.  I.  (§  156);  Wis.  (§  1681-5). 


120         PRESENTMENT  FOR  ACCEPTANCE.        §73 

were  not  in  accord.^^  Presentment  is  not  necessary  to  charge  one 
who,  before  the  bill  was  drawn,  promised  unconditionally,  in  writ- 
ing, to  accept  it.^3 

Time  For  Presentment. 

§  73.  Except  as  herein  otherwise  stated,  the  holder  of  a  bill  re- 
quiring presentment  for  acceptance  must  either  present  it 
for  acceptance  or  negotiate  it  within  a  reasonable  time. 
If  he  fail  to  do  so,  the  drawer  and  all  indorsers  are  dis- 
charged. 

§  74,  Presentment  for  acceptance  must  be  made  at  a  reasonable 
hour,  on  a  business  day,  and  before  the  bill  is  overdue. 

§  75.  Where  the  time  for  presentment  falls  on  Sunday  or  a  holi- 
day, the  act  may  be  done  on  the  next  succeeding  secular 
or  business  day.  When  Saturday  is  not  otherwise  a  holi- 
day,  presentment  may  be  made  before  twelve  o'clock  noon 
on  that  day. 

§  76.    Where  the  holder  of  a  bill  drawn  payable  elsewhere  than 
at  the  place  of  business  or  the  residence  of  the  drawee 
^  has  not  time  with  the  exercise  of  reasonable  diligence  to 

present  the  bill  for  acceptance  before  presenting  it  for 
payment  on  the  day  that  it  falls  due,  the  delay  caused 
by  presenting  the  bill  for  acceptance  before  presenting  it 
for  payment  is  excused  and  does  not  discharge  the  draw- 
ers and  indorsers. 

Holder  must  present  or  negotiate  within  reasonable  time. 

The  holder  of  any  bill  which  must  be  presented  for  acceptance 
must  either  present  it  or  negotiate  it  within  a  reasonable  time; 

12  See  1  Daniels,  Negotiable  Inst.  (5th  Ed.)  p.  471,  §  458. 
iswhilden  v.   Merchants'    &   Planters'    Nat.    Bank,   64   Ala.    1,   38   Am. 
Rep.  1. 


§  76  TIME    FOR    PRESENTATION.  121 

otherwise,  the  drawee  and  all  indorsers  will  be  discharged. ^^ 
Though  it  has  been  held  that,  when  a  bill  is  made  payable  at  a 
fixed  time  after  its  date,  presentment  for  acceptance  before  that 
time  is  not  necessary  in  order  to  charge  the  drawer  or  indorsers, 
it  may  be  presented  for  acceptance  at  any  time.^^  AVhat  consti- 
tutes a  reasonable  time  depends  upon  the  nature  of  the  instrument, 
the  usages  of  trade,  and  the  circumstances  of  the  case.^^  A  bill 
payable  four  months  from  date  was  presented  for  acceptance 
within  a  reasonable  time  where  presented  some  five  weeks  before 
maturity  ;^'^  and  presentment  of  a  bill  draw^n  in  Georgia,  payable 
in  New  York  sixty  days  after  sight,  within  two  months  and  a  half 
after  the  bill  was  drawn,  was  within  a  reasonable  time.^^  A  for- 
eign bill  which  is  payable  a  certain  number  of  days  after  sight 
need  not  be  sent  directly  to  the  drawee  for  acceptance,  but  may 
be  sent  in  the  manner  sanctioned  by  the  customs  of  trade  existing 
at  the  time,  and,  if  such  is  the  custom,  may  be  sent  to  a  broker 
in  another  country  for  negotiation,  and  presentment  will  be  in 

1*  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C.,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or., 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  144);  Ariz.  (§  3447);  111. 
(§  143);  Kan.  (§  151);  Md.  (§  163);  Mich.  (§  146);  Neb.  (§  143);  N.  Y. 
(§  241);  Ohio  (§  3176  h);  R.  I.  (§  152);  Wis.  (§  1681-1). 

15  National  Park  Bank  v.  Laitta,  127  App.  Div.  624,  111  N.  Y.  Supp.  927. 

16  Neg.    Inst.    Laws    Colo.,    Conn.,    D.    C.    Fla.,    Idaho,    Iowa,   Ky.,    La.,' 
Mass.,   Mo.,   Mont.,   Nev.,   N.   H.,  N.  J.,   N.   M.,   N.   C,   N.  D.,   Okl.,   Or., 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  193);  Ariz.  (§  3489);  111. 
(§  192);  Kan.  (§  4);  Md.  (§  16);  Mich.  (§  2);  Neb.  (§  191);  N.  Y.  (§  4); 
Ohio  (§  3178b);  R.  I.  (§  4);  Wis.  (§  1675). 

Fugitt  V.  Nixon,  44  Mo.  295;  Smith  v.  Janes,  20  Wend.  (N.  Y.)  192, 
32  Am.  Dec.  527;  Wallace  v.  Agry,  5  Mason,  118,  Fed.  Cas.  No.  17,097. 

i7Bachellor  v.  Priest,  29  Mass.   (12  Pick.)   399. 

18  Robinson  v.  Ames,  20  Johns.  (N.  Y.)  146,  11  Am.  Dec.  259.  But  see 
Phoenix  Ins.  Co.  v.  Allen,  11  Mich.  501,  83  Am.  Dec.  756,  where  a  delay 
of  21  days  was  held  unreasonable,  and  Aymar  v.  Beers,  7  Cow.  (N.  Y.) 
705,  17  Am.  Dec.  538,  where  a  delay  of  29  days  was  excusable  because 
of  distance  and  the  illness  of  the  payee. 

Delay  in  the  mails  is  not  chargeable  to  a  holder  who  has  sent  bill  for 
acceptance  within  a  proper  time.    Walsh  v.  Blatchley,  6  Wis.  413. 

See,  also,  generally,  on  subject  of  reasonable  time,  Prescott  Bank  v. 
Caverly,  73  Mass.  (7  Gray)  217,  66  Am.  Dec.  473;  Gowen  v.  Jackson,  20 
Johns.    (N.  Y.)    176. 


122         PRESENTMENT  FOR  ACCEPTANCE.        §  Hi 

time  if  made  in  the  usual  course  of  trade  and  not  unreasonably 
delayed.i^  An  indorser  for  the  accommodation  of  the  drawer  is 
not  discharged  by  the  fact  that  presentment  is  not  made  until 
maturity,  where  the  bill  was  negotiated  by  the  drawer  under  an 
agreement,  to  which  the  indorser  was  not  privy,  that  the  bill 
should  not  be  presented  until  that  time.^o  The  drawer  may  waive 
presentment  to  the  drawee  by  notifying  the  drawee  not  to  pay .21 
A  waiver  of  acceptance  by  the  drawer  puts  him  in  the  same  po- 
sition as  if  the  bill  had  been  presented  and  acceptance  refused,"^ 

Reasonable  hour;  business  day. 

Presentment  for  acceptance  must  be  made  before  the  bill  is 
overdue,  at  a  reasonable  hour  on  a  business  day.^^  The  rules  gov- 
erning presentment  for  payment  govern  presentment  for  accept- 
ance in  this  respect.2*  But  presentment,  two  days  before  ma- 
turity, of  an  unaccepted  sight  draft  indorsed,  "Accepted.  Pay- 
able at  P.  &  M.  Bank,"  is  conclusively  presumed  to  be  a  present- 
ment for  acceptance,  and  not  a  presentment  for  payment.^s 

When  the  day  for  presentment  falls  upon  Sunday,  or  a  holi- 
day, the  instrument  is  payable  on  the  next  succeeding  business 

19  Wallace  v.  Agry,  4  Mason,  336,  Fed.  Cas.  No.  17,096.  See,  also,  on 
effect  of  custom  and  usage,  Jordan  v.  Wheeler,  20  Tex.  698. 

20  Fall  River  Union  Bank  v.  Willard,  46  Mass.  (5  Mete.)  261. 

21  Neederer  v.  Barber,  Fed.  Cas.  No.  10,079. 

22  Carson's  Adm'rs  v.  Russell,  26  Tex.  452. 

23  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or., 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  145);  Ariz.  (§  3448);  111. 
(§  144);  Kan.  (§  152);  Md.  (§  164);  Mich.  (§  147);  Neb.  (§  144);  N.  Y. 
(§  242);  Ohio  (§  3176-1);  R.  I.   (§  153);  Wis.   (§  1681-2). 

The  rule  in  Dana  v.  Sawyer,  22  Me.  244,  39  Am.  Dec.  574,  that  a  pre- 
sentment for  payment  at  or  about  midnight  is  not  at  a  reasonable  hour, 
would  doubtless  apply  by  analogy  to  a  presentment  for  acceptance. 

21  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or., 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  146);  Ariz.  (§  3449);  111. 
(§  145);  Kan.  (§  153);  Md.  (§  165);  Mich.  (§  148);  Neb.  (§  145);  N.  Y. 
(§  243);  Ohio  (§  3176  j);  R.  I.  (§  154);  Wis.  (§  1681-3). 

See  post,  chapter  XII,  Presentment  for  Payment,  §   182. 

25  Burrus  v.  Life  Ins.  Co.,  124  N.  C.  9,  32  S.  E.  323. 


§V7  PLACE  OF  PRESENTMENT.  123 

day.-''    Where  Saturday  is  not  otherwise  a  holiday,  presentment 
may  be  made  before  twelve  o'clock  on  that  day.'^^ 

Rule  where  time  is  insufficient. 

If  a  holder  of  a  bill  drawn  payable  elsewhere  than  at  the  place 
of  business  or  the  residence  of  the  drawee  has  not  time,  with 
the  exercise  of  reasonable  diligence,  to  present  the  bill  for  ac- 
ceptance before  presenting  it  for  payment  on  the  day  of  its  ma- 
turity, the  delay  caused  by  presenting  tlie  bill  for  acceptance  be- 
fore presenting  it  for  payment  is  excused,  and  does  not  discharge 
the  drawers  and  indorsers.-^ 

Place  of  Presentment. 

§  77.    If  a  place  of  payment  is  named  in  the  bill,  presentment 
must  be  made  there. 

If  a  bill  is  one  which  requires  a  presentment  for  acceptance,  and 
indicates  a  place  where  such  presentment  is  to  be  made,  a  pre- 
sentment should,  of  course,  be  made  at  that  place.  If  a  place  of 
payment  is  named  in  the  bill,  presentment  for  acceptance  may  be 
made  there.^^    It  must  be  remembered,  however,  that,  other  feat- 

26  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or., 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  85);  Ariz.  (§  3388);  111. 
(§  85);  Kan.  (§  92);  Md.  (§  14);  Mich.  (§  87);  Neb.  (§  85);  N.  Y.  (§ 
145);  Ohio  (§  3174  c);  R.  I.  (§  93);  Wis.   (§  1678-15). 

27  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or., 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  146);  Ariz.  (§  3449);  111. 
(§  145);  Kan.  (§  153);  Md.  (§  165);  Mich.  (§  148);  Neb.  (§  145);  N.  Y. 
(§  243);  Ohio  (§  3176  j);  R.  I.  (§  154);  Wis.  (§  1681-3). 

28  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or., 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  147);  Ariz.  (§  3450);  111'. 
(§  146);  Kan.  (§  154);  Md.  (§  166);  Mich.  (§  149);  Neb.  (§  146);  N.  Y. 
(§  244);  Ohio  (§  3176  k);  R.  I.  (§  155);  Wis.  (§  1681-4). 

29  Wolfe  V.  Jewett,  5  La.  614. 

The  charter  of  Greater  New  York  (§§  1499-1504,  inclusive)  provides 
that,  whenever  the  board  of  health  shall  publicly  designate  any  part  of 


124         PRESENTMENT  FOR  ACCEPTANCE.        §  73 

ures  requiring  presentment  being  absent,  presentment  for  accept- 
ance is  no  longer  necessary  if  the  bill  is  drawn  payable  at  the  res- 
idence or  place  of  business  of  the  drawee.^^ 

By  Whom  Presentment  Must  Be  Made. 

§  78.     Presentment  must  be  made  by  or  on  behalf  of  the  holder. 

Presentment  for  acceptance  must  be  made  by  the  holder  or  by 
one  duly  authorized  to  present  the  bill  on  his  behalf.^^  It  may 
be,  and  usually  is,  made  by  a  notary  on  behalf  of  the  holder.^^ 

To  "Whom  Presentment  Must  Be  Made. 

§  79.  Presentment  must  be  made  to  the  drawee  or  some  person 
authorized  to  accept  or  refuse  acceptance  on  his  behalf. 

§  80.  Where  a  bill  is  addressed  to  two  or  more  drawees  who  are 
not  partners,  presentment  must  be  made  to  them  all  un- 
less one  has  authority  to  accept  or  refuse  acceptance  for 
all,  in  which  case  presentment  may  be  made  to  him  only. 

the  city  as  the  seat  of  a  contagious  or  infectious  disease,  persons  or 
firms  doing  business  within  the  infected  district  shall  designate  in  a  reg- 
ister, to  be  kept  by  the  city  clerk,  a  place  outside  of  the  said  district,  but 
within  the  city,  at  which  presentment  of  bills  and  notes  may  be  made. 
If  no  registry  is  made,  presentment  may  be  made  to  the  city  clerk,  and 
notice  of  protest  served  by  depositing  it  in  one  of  the  post  offices  in 
said  city. 

30  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or., 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  143);  Ariz.  (§  3446);  111. 
(§  142);  Kan.  (§  150);  Md.  (§  162);  Mich.  (§  145);  Neb.  (§  142);  N.  Y. 
(§  240);  Ohio  (§  3176  g);  R.  I.  (§  151);  Wis.  (§  1681). 

31  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or., 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  145);  Ariz.  (§  3448);  111. 
(§  144);  Kan.  (§  152);  Md.  (§  164);  Mich.  (§  147);  Neb.  (§  144);  N.  Y. 
(§  242);  Ohio  (§  31761);  R.  I.  (§  153);  Wis.  (§  1681-2). 

32  Wiseman  v.  Chiappella,  64  U.  S.  (23  How.)  368,  16  Law.  Ed.  597; 
Whaley  v.  Houston,  12  La.  Ann.  585;  Stainback  v.  Bank  of  Virginia,  11 
Grat.  (Va.)  260. 


§  82  TO  WHOM  MADE.  125 

§  81.  Where  the  drav/ee  is  dead,  presentment  may  be  made  to 
his  personal  representatives. 

§  82.  Where  the  drawee  has  been  adjudged  a  bankrupt  or  an 
insolvent  or  has  made  an  assignment  for  the  benefit  of 
creditors,  presentment  may  be  made  to  him  or  to  his  trus- 
tee or  assignee. 

To  v»/^hom  presentment  rnupt  be  made — Urawee  or  his  a^ent. 

It  is  a  general  rule  that  presentment  for  acceptance  must  be 
made  to  the  drawee  or  to  some  person  authorized  to  accept  or  re- 
fuse acceptance  on  his  behalf.^^  If  possible,  presentment  should 
be  made  to  the  drawee  personally.^* 

Same — Bill  addressed  to  two  or  more  drawees  not  partners. 

If  a  bill  is  addressed  to  two  or  more  drawees  who  are  partners, 
presentment  to  one  of  them  is,  of  course,  sufficient  ;2^  but,  if  such 
drawees  are  not  partners,  presentment  must  be  made  to  them  all, 

33  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or.', 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  145);  Ariz.  (§  3448);  111'. 
(§  144);  Kan.  (§  152);  Md.  (§  164);  Mich.  (§  147);  Neb.  (§  144);  N.  Y. 
(§  242);  Ohio  (§  3176  i);  R.  I.  (§  153);  Wis.  (§  1681-2). 

In  some  of  the  negotiable  instruments  laws  these  sections  required  pre- 
sentment to  be  made  to  the  "drawer,"  but  the  obvious  error  was  cor- 
rected in  the  Rhode  Island  law  (§  153),  and  by  amendment  in  New  York 
(Laws  1898,  c.  336,  §  30). 

Cheek  v.  Roper,  5  Esp.  175. 

34  Wiseman  v.  Chiappella,  64  U.  S.  (23  How.)  368,  16  Law.  Ed.  397; 
Sharpe  v.  Drew,  9  Ind.  281. 

But  presentment  to  a  clerk  of  the  drawee  at  his  office,  the  drawee  be- 
ing absent,  is  sufficient.  Whaley  v.  Houston,  12  La.  Ann.  585;  Stain- 
back  V.  Bank  of  Virginia,  11  Grat.  (Va.)  260. 

The  mere  absence  of  the  drawee  of  a  bill  payable  after  date,  when 
called  on  for  acceptance,  is  not  a  refusal  to  accept.  Bank  of  Wash- 
ington V.  Triplett,  26  U.  S.  (1  Pet.)  25,  7  Law.  Ed.  433.  See,  also.  Bank 
of  Red  Oak  v.  Orvis,  42  Iowa,  691. 

35  Mt.  Pleasant  Branch  of  State  Bank  v.  McLeran,  26  Iowa,  306,  1  Am 
Rep.  273. 


126         PRESENTMENT  FOR  ACCEPTANCE.        §  «-; 

unless  one  has  authority  to  accept  or  to  refuse  acceptance  for  all, 
in  which  case  presentment  to  him  is  sufficient.^^ 

Same — Drawee  dead. 

If  the  drawee  is  dead,  presentment  may  be  made  to  his  per- 
sonal representative,^^  but,  though  advisable  for  purposes  of  pro- 
test, it  is  not  necessary  to  make  presentment  in  such  case.^^ 

Same — Bankruptcy  or  insolvency  of  drav/ee. 

Analogous  to  the  rule  that  notice  of  dishonor  may  be  given  to 
the  assignee  of  an  insolvent  party  to  commercial  paper  ^9  is  the 
rule  that,  if  the  drawee  is  a  bankrupt  or  an  insolvent,  or  has  made 
an  assignment  for  the  benefit  of  creditors,  presentment  for  ac- 
ceptance may  be  made  to  him  or  his  trustees  or  assignees.*^  It 
will  be  seen  that  the  rule  is  in  the  alternative,  and  presentment 
to  either  will  be  good. 


Bills  Drawn  In  Sets. 

§  83.    "Where  a  bill  is  drawn  in  a  set,  presentment  of  any  one  part 
for  acceptance  is  sufficient. 

A  bill  being  drawn  in  a  set,  presentment  of  any  one  part  for 

36  Subdivision  1,  same  sections  of  negotiable  instruments  laws  as  last 
above  cited. 

37  Subdivision  2,  same  sections  of  negotiable  instruments  laws  as  last 
above  cited. 

38Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or., 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  148);  Ariz.  (§  3451);  111. 
(§  147);  Kan.  (§  155);  Md.  (§  167);  Mich.  (§  ISO);  Neb.  (§  147);  N.  Y. 
(§  245);  Ohio  (§  31761);  R.  L  (§  156);  Wis.  (§  1681-5). 

39Callahan  v.  Bank  of  Kentucky,  82  Ky.  231;  American  Nat.  Bank  v. 
Junk  Bros.  Lumber  &  Mfg.  Co.,  94  Tenn.  624,  30  S.  W.  753,  28  L.  R.  A. 
492.  But  see  House  v.  Vinton  Nat.  Bank,  43  Ohio  St.  346,  1  N.  E.  129, 
54  Am.   Rep.   813. 

*o  Subdivision  3,  same  sections  of  negotiable  instruments  laws  as  last 
above  cited. 


§  86  DISHONOR.  127 

acceptance  is  sufficient,*^  and  it  will  not  be  presumed  that  the 
drawee  will  accept  more  than  one  part.*^ 

NON  ACCEPTANCE. 

§  84.    A  bill  is  dishonored  by  nonacceptance : 

1.  When  it  is  duly  presented  for  acceptance  and  such 

an  acceptance  as  is  prescribed  is  refused  or  cannot 
be  obtained;  or 

2.  When    presentment    for    acceptance  is  excused  and 

the  bill  is  not  accepted. 

If  a  bill  is  duly  presented  for  acceptance,  and  acceptance  is  re- 
fused or  cannot  be  obtained,  the  bill  is  dishonored  for  nonaccept- 
ance.*^  It  is  also  dishonored  when  presentment  for  acceptance 
is  excused,  for  the  reasons  heretofore  given,  and  the  bill  is  not  ac- 
cepted.** 

Rights  and  Duties  of  Holder. 

§  85.  When,  a  bill  is  dishonored  by  nonacceptance,  an  immediate 
right  of  recourse  against  the  drawers  and  indorsers  ac- 
crues to  the  holder  and  no  presentment  for  payment  is 
necessary. 

§  86.  But  this  right  is  lost  if,  after  the  bill  has  been  duly  pre- 
sented for  acceptance,  and  has  not  been  accepted  within 
the  prescribed  time,  the  holder  does  not  treat  the  bill  as 
dishonored  by  nonacceptance. 

"Where  a  bill  is  dishonored  by  nonacceptance,  the  holder  has 
an  immediate  right  of  recourse  against  the  drawers  and  indorsers 

«  Walsh  V.  Blatchley,  6  Wis.  413. 

42  Commercial  Bank  v.  Routh,  7  La.  Ann.  128. 

43  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or., 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  149);  Ariz.  (§  3452);  111. 
(§  148);  Kan.  (§  156);  Md.  (§  168);  Mich.  (§  151);  Neb.  (§  148);  N.  Y. 
(§  246);  Ohio  (§  3176  m);  R.  I.   (§  157);  Wis.   (§   1681-6). 

44  Same  sections  of  negotiable  instruments  laws  as  last  above  cited. 


128         PRESENTMENT  FOR  ACCEPTANCE.        §  87 

without  presenting  the  bill  for  payment,^^  j^^^^  t^jg  right  is  lost  if, 
after  tlie  bill  has  been  duly  presented  for  acceptance,  and  has  not 
been  accepted  within  the  prescribed  time,  the  holder  does  not 
treat  the  bill  as  dishonored  by  nonacceptance,  and  protest  it  ac- 
cordingly.^s  The  liability  of  the  drawers  and  indorsers  being 
once  fixed  by  a  proper  protest  for  nonacceptance,  coupled  with 
a  proper  notice,  the  right  to  recover  against  them  is  complete.*'^ 

Referee  in  Case  op  Need. 

§  87.  The  drawer  and  any  indorser  of  a  bill  may  insert  thereon 
the  name  of  a  person  to  whom  the  holder  may  resort  in 
case  the  bill  is  dishonored  by  nonacceptance.  Such  person 
is  called  the  referee  in  case  of  need.  It  is  in  the  option 
of  the  holder  to  resort  to  the  referee  in  case  of  need  or 
not  as  he  may  see  fit. 

The  drawer  or  any  indorser  may  insert  in  a  bill  of  exchange 
the  name  of  the  person  to  whom  the  holder  may  resort  in  case 
of  need,  that  is,  if  the  bill  is  dishonored  for  nonacceptance  or  non- 
payment.*^   It  is  optional  with  the  holder  to  resort  to  this  referee 

*5  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or., 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  150);  Ariz.  (§  3453);  111. 
(§  149);  Kan.  (§  157);  Md.  (§  169);  Mich.  (§  152);  Neb.  (§  149);  N.  Y. 
(§  247);  Ohio  (§  3176m);  R.  I.  (§  158);  Wis.  (§  1681-7). 

*6  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or., 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  151);  Ariz.  (§  3454);  111. 
(§  150);  Kan.  (§  158);  Md.  (§  170);  Mich.  (§  153);  Neb.  (§  150);  N.  Y. 
(§  248);  Ohio  (§  3176  o);   R.  L   (§   159);  Wis.   (§   1681-8). 

*7  Wallace  v.  Agry,  4  Mason,  336,  Fed.  Cas.  No.  17,096;  Pendleton  v. 
Knickerbocker  Life  Ins.  Co.,  5  Fed.  238;  Sterry  v.  Robinson,  1  Day 
(Conn.)  11;  Pecquet  v.  Mager,  7  La.  418;  Lenox  v.  Cook,  8  Mass.  460; 
Plato  V.  Reynolds,  27  N.  Y.  586;  Carson  v.  Russell,  26  Tex.  452. 

48  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl,  Or., 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  131);  Ariz.  (§  3434);  111. 
(§  130);  Kan.  (§  138);  Md.  (§  150);  Mich.  (§  133);  Neb.  (§  130);  N.  Y. 
(§  215);  Ohio  (§  3175  v);  R.  L  (§  139);  Wis.  (§  1680-E). 


§87  REFEREE  IN  CASE  OF  NEED.  129 

in  case  of  need/^  but  if  the  holder  does  resort  to  such  referee, 
and  the  latter  pays,  he  has  recourse  against  the  drawer  for  the 
full  amount.^o 

A  drawee  in  "case  of  need"  of  a  draft  for  the  price  of  goods,  who  pays 
the  draft,  has  a  special  property  in  the  goods,  though  ownership  remains 
in  the  consignor.     Basche  v.  Philips,  155  Pa.  St.  103. 

By  amendment  in  New  York,  the  word  "drawee"  in  the  headline  of 
the  original  law  was  changed  to  "referee."     Laws   1898,  c.  336,  §  24. 

Payment  of  bills  of  exchange  supra  protest  or  for  honor,  see  post, 
§  253. 

*9Same  sections  of  the  negotiable  instruments  laws  as  last  above  cited. 
This  seems  to  change  the  law.     See  1  Daniel,  Negotiable  Inst.,  §  111. 

60  Chit.  Bills,  186;  Story,  Bills,  §  65. 


Opp. — PM. — 9 


CHAPTER  VIII. 


ACCEPTANCE  OF  BILLS  OF  EXCHANGE. 

§  88.  Necessity. 

§  89.  Nature. 

§  90.  Revocation. 

§  91.  Necessity  of  Writing  and  Signature  of  Drawee. 

§  92.  Acceptance  on  Bill. 

§  93.  Acceptance  on  Separate  Instrument. 

§  94.  Implied  Acceptance. 

§  95.  Medium  of  Payment. 

§  96.  Presumption  of  Consideraition. 

§  97.  Sufficiency  of  Consideration. 

§  98.  Time  of  Acceptance. 

§  99.  Insertion  of  Date. 

§  100.  Insertion  of  Wrong  Date.          * 

§  101.  Date  Prima  Facie  Correct. 

§  102.  General  and  Qualified  Acceptance. 

§  103.  Qualified  Acceptance. 

§  104.  Right  to  General  Acceptance. 

§  105.  Incomplete  and  Overdue  Paper. 

§  106.  Bills  Drawn  in  Sets. 

§  107.  Acceptance  on  More  Than  One  Part. 

§  108.  Certification. 

§  109.  Effect  of  Certification. 

§  110.  Necessity  of  Writing. 

§  111.  Certification  by  Drawer. 

§  112.  Certification  by  Holder. 

§  113.  Promise  to  Accept. 

Necessity. 

§  88.     The  drawee  is  not  liable  on  a  bill  or  a  check  unless  and 
until  he  accepts  it,  or  promises  to  accept  it. 

The  rule  that  the  drawee  is  not  liable  on  a  bill  unless  and  until 
he  accepts  it  ^  is  a  logical  outcome  of  the  rule  that  a  bill  does  not, 

iNeg.    Inst.    Laws    Colo.,    Conn.,    D.    C,    Fla.,    Idaho,    Iowa,    Ky.,    La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.   H.,  N.  J.,  N.  M.,  N.   C,  N.  D.,  Okl,  Or., 

130 


^  90  NATURE.  131 

of  itself,  operate  as  an  assignment  of  funds  in  the  hands  of  the 
drawee.^  Before  acceptance,  there  is  no  liability  on  the  part  of 
the  drawee,  because  there  is  no  privity  of  contract  between  him 
and  any  of  the  other  parties  to  the  bill,  and  he  is  a  stranger  to 
the  transaction.^ 


Nature  < — Revocation. 

§  89.  The  acceptance  of  a  bill  is  the  signification  by  the  drawee 
of  his  assent  to  the  order  of  the  drawer  and  means  an 
acceptance  completed  by  delivery  or  notification. 

§  90.  An  acceptance  may  be  revoked  before  delivery  of  the  ac- 
cepted bill. 

A  contract  relation  between  the  drawee  and  the  other  parties 
to  a  bill  is  first  effected  by  the  acceptance  of  the  bill  by  the 
drawee,  as  that  is  the  signification  of  his  assent  to  the  order  of 

Pa.,  Tenn.,  Utah,  Va,  Wash.,  W.  Va.,  Wyo.  (§  127);  Ariz.  (§  3430);  111. 
(§  126);  Kan.  (§  134);  Md.  (§  146);  Mich.  (§  129);  Neb.  (§  126);  N.  Y. 
(§  211);  Ohio  (§  3175  r);  R.  I.  (§  135);  Wis.   (§  1680  a). 

Van  Buskirk  v.  State  Bank  of  Rocky  Ford,  35  Colo.  142,  83  Pac.  778, 
117  Am.  St.  Rep.  182;  Luflf  v.  Pope,  5  Hill  (N.  Y.)  413;  Seattle  Shoe  Co. 
V.  Packard,  43  Wash.  427,  86  Pac.  845;  Baltimore  &  Ohio  R.  Co.  v.  First 
Nat.  Bank,  102  Va.  753,  47  S.  E.  837. 

2  See  ante,  §§  68-70. 

3  Colorado  Bank  v.  Boettcher,  5  Colo.  185,  40  Am.  Rep.  142;  Luff  v. 
Pope,  5  Hill  (N.  Y.)  413;  Bailey  v.  Southwestern  Railroad  Bank,  11  Fla. 
266;  Bullard  v.  Randall,  67  Mass.  (1  Gray)  605,  61  Am.  Dec.  433;  Kimball 
V.  Donald,  20  Mo.  577,  64  Am.  Dec.  209;  Hankin  v.  Squires,  5  Biss.  186, 
Fed.  Cas.  No.  6,025;  Northumberland  Bank  v.  AlcMichael,  106  Pa.  460, 
51  Am.  Rep.  529;  Van  Buskirk  v.  State  Bank  of  Rocky  Ford,  35  Colo. 
142,  83  Pac.  778,  117  Am.  St.  Rep.  182;  Seattle  Shoe  Co.  v.  Packard,  43 
Wash.  527,  86  Pac.  845;  Baltimore  &  Ohio  R.  Co.  v.  First  Nat.  Bank, 
102  Va.  753,  47  S.  E.  837. 

The  same  is  true  of  an  order.  Woodruff  v.  Hensel,  5  Colo.  App.  103, 
37  Pac.  948;  Weinstock  v.  Bellwood,  75  Ky.  (12  Bush.)  139;  Reilly  v. 
Daly,  159  Pa.  605,  28  Atl.  493.  But  see  Gurnee  v.  Hutton,  63  Hun,  197, 
17  N.  Y.  Supp.  667,  and  Brem  v.  Covington,  104  N.  C.  589,  10  S.  E.  706, 


132  ACCEPTANCE  OF  BILLS.  §91 

the  drawer.*  To  be  binding,  however,  an  acceptance  must  be  com- 
pleted by  delivery  or  notification.^  If  an  acceptance  is  dated,  the 
date  given  is  prima  facie  the  true  date  of  the  acceptance.^ 

An  acceptance  may  be  revoked  before  the  delivery  of  the  ac- 
cepted bill ;  '^  but  a  drawee  cannot  revoke  his  acceptance,  on  dis- 
covering the  insolvency  of  the  drawer,  after  haA'ing  indorsed  his 
acceptance  on  the  bill  and  redelivered  it  to  the  agent  of  the 
holder,  though  he  has  no  funds  of  .the  drawer  in  his  hands.^ 

Necessity  op  "Writing. 

§  91.  Under  most  of  the  negotiable  instruments  acts  the  accept- 
ance must  be  in  writing  and  signed  by  the  drawee. 

§  92.  The  holder  of  a  bill  presenting  the  same  for  acceptance 
may  require  that  the  acceptance  be  written  on  the  bill, 
and,  if  such  request  is  refused,  may  treat  the  bill  as  dis- 
honored. 


where  orders  were  held  to  be  equitable  assignments,  and  the  drawers  to 
be  liable  without  acceptance. 

*  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or.. 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  132);  Ariz.  (§  3435);  111. 
(§  131);  Kan.  (§  139);  Md.  (§  151);  Mich.  (§  134);  Neb.  (§  131);  N.  Y. 
(§  220);  Ohio  (§  317Sw);  R.  L  (§  140);  Wis.  (§  1680  f). 

5  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N..  D.,  Okl.,  Or., 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  191);  Ariz.  (§  3487);  111. 
(§  190);  Kan.  (§  2);  Md.  (§  14);  Mich.  (§  2);  Neb.  (§  189);  N.  Y.  (§  2); 
Ohio  (§  3178);  R.  I.(§  2);  Wis.  (§  1675). 

6  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C.,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or., 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  11);  Ariz.  (§  3314);  111. 
(§  11);  Kan.  (§  18);  Md.  (§  30);  Mich.  (§  13);  Neb.  (§  11);  N.  Y.  (§  30); 
Ohio  (§  3171  j);  R.  I.  (§  19);  Wis.  (§  1675-11). 

7  Cox  V.  Troy,  5    Barn.  &  Aid.  474. 

8  Trent  Tile  Co.  v.  Ft.  Dearborn  Nat.  Bank,  54  N.  J.  Law,  33,  23  Atl. 
423,  distinguishing  Cox  v.  Troy,  5  Barn.  &  Aid.  474. 


§  93  NECESSITY    OF   WRITING.  133 

§  93.  An  acceptance  on  a  separate  instrnment  is  binding  only  in 
favor  of  one  to  whom  it  is  shown  and  who,  on  the  faith 
thereof,  receives  the  bill  for  value. 

Must  be  in  writing  and  signed  by  drawee. 

An  oral  acceptance  of  a  bill  is  good,  in  the  absence  of  a  statute 
requiring  a  written  one.^  But  in  the  states  that  have  adopted  the 
negotiable  instruments  law,^°  and  in  some  other  states,  the  ac- 

9Heitschmidt  v.  McAlpin,  59  III.  App.  231;  Spurgeon  v.  Swaih,  13  Ind. 
App.  188,  41  N.  E.  397;  Pierce  v.  Kittredge,  115  Mass.  374;  Spaulding  v. 
Andrews,  48  Pa.  411. 

An  oral  acceptance  is  not  within  the  statute  of  frauds.  Walton  v.  Man- 
deville  (Iowa)  5  N.  W.  776.  On  a  rehearing  of  the  case  last  cited  (56 
Iowa,  597,  9  N.  W.  913,  41  Am.  Rep.  123),  it  was  held  that,  if  the  drawee 
has  no  funds  of  the  drawer  on  hand,  his  oral  acceptance  is  within  the 
statute,  as  a  promise  to  pay  the  debt  of  another.  To  same  effect  see 
Pike  V.  Irwin,  1  Sandf.  (N.Y.)  14;  Manley  v.  Geagan,  105  Mass.  445. 

Oral  promise  to  accept,  see  post,  §  113. 

lONeg.  Inst.  Laws  Colo.,  Conn.,  D.  C.,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or., 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  132);  Ariz.  (§  3435);  111. 
(§  131);  Kan.  (§  139);  Md.  (§  151);  Mich.  (§  134);  Neb.  (§  131);  N.  Y. 
(§  220);  Ohio  (§  3175  w);  R.  I.  (§  140);  Wis.  (§  1680  f). 

Seattle  Shoe  Co.  v.  Packard,  43  Wash.  527,  86  Pac.  845,  117  Am.  St. 
Rep.  1064;  Baltimore  &  O.  R.  Co.  v.  First  Nat.  Bank,  102  Va.  753,  47 
S.  E.  837;  National  Park  Bank  v.  Saitta,  127  App.  Div.  624,  111  N.  Y. 
Supp.  927.  Complaint  must  allege  written  acceptance.  Wadhams  v. 
Portland,  V.  &  Y.  R.  Co.,  n  Wash.  86,  79  Pac.  597.  The  negotiable  in- 
struments laws  adopted  in  some  of  the  states  provide  that  the  acceptance 
musit  be  signed  by  the  "drawer."  This  palpable  error  is  corrected  in 
the  Rhode  Island  law  (§  140),  and  by  amendment  in  New  York  (Laws 
1898,  c.  336,  §  27). 

Previously  an  oral  acceptance  was  good  in  Connecticut  (Jarvis  v.  Wil- 
son, 46  Conn.  901,  33  Am.  Rep.  18);  Illinois  (Edward  Hines  Lumber  Co. 
V.  Anderson,  141  111.  App.  527);  Massachusetts  (Pierce  v.  Kittredge,  115 
Mass.  374);  New  York,  prior  to  Rev.  St.  pt.  2,  c.  4,  tit.  2,  §  6  (Leonard 
v.  Mason,  1  Wend.  [N.  Y.]  522;  Ontario  Bank  v.  Worthington,  12  Wend. 
[N.  Y.]  593,  and  Johnson  v.  Clark,  39  N.  Y.  216);  and  North  Carolina 
(Short  V.  Blount,  99  N.  C.  49,  5  S.  E.  190). 

The  negotiable  instruments  law  affirms  the  rule  previously  existing 
in  Alabama  (Code,  §§  2101,  2102);  Michigan  (How.  Ann.  St.  §  1583); 
Missouri   (Rev.  St.   1889,  §  719.     See   Haeberle  v.   O'Day,  61   Mo.  App. 


134  ACCEPTANCE  OF  BILLS.  §  93 

eeptance  must  be  in  writing  and  signed  by  the  drawee,^  As  no 
contrary  provision  for  the  acceptance  of  a  promise  to  pay  a  check 
has  been  made,  this  provision  is  deemed  to  apply  to  checks.^^  In 
considering  this  section  the  distinction  between  an  action  founded 
on  the  instrument  as  an  accepted  bill  or  check,  and  one  founded 
on  a  breach  of  a  promise  to  accept,  should  be  kept  in  mind.^^  The 
best  form  of  a  general  acceptance  consists  of  the  word  "Ac- 
cepted" written  across  the  face  of  the  bill,  followed  by  the  sig- 
nature of  the  drawee,  but  the  signature  alone  is  a  sufficient  writ- 
ten acceptance,^*  and  other  words  than  the  word  "Accepted"  will 
suffice  if  the  intention  is  to  accept  the  bill.^^  The  New  York  court, 
in  holding  that  there  is  a  sufficient  acceptance  where  the  drawee 
writes  his  name  across  the  face  of  the  bill,  states  that  ' '  any  words 
written  by  the  drawee  on  a  bill,  not  putting  a  direct  negative 
upon  its  request,  as  'Accepted,'  'Presented,'  'Seen,'  the  day  of 
the  month,  or  a  direction  to  a  third  person  to  pay  it,  is  prima  facie 
a  complete  acceptance  by  the  law  merchant.  "^^ 

Same — Acceptance  on  face  of  bill  or  on  separate  instrument. 

The  holder,  on  presenting  a  bill  for  acceptance,  may  require 
that  the  acceptance  be  written  on  the  bill,  and  may  treat  the  bill 

390) ;  Oregon  (Hill's  Ann.  Laws,  §  3194;  Erickson  v.  Inman,  Poulson  & 
Co.,  34  Or.  44,  54  Pac.  949);  Pennsylvania  (Act  May  10,  1881,  P.  L.  17). 
But  in  Pennsylvania  the  acceptor  only  could  take  advantage  of  the  stat- 
ute.   Ulrich  v.  Howner,  156  Pa.  414,  27  Atl.  243. 

11  California  (Civ.  Code,  §  3193);  Maine  (Rev.  St.  c.  32,  §  10). 

12  Van  Buskirk  v.  State  Bank  of  Rocky  Ford,  35  Colo.  142,  83  Pac.  778, 
117  Am.  St.  Rep.  182.  Response  of  drawee  bank  over  telephone  that 
check  was  good  held  insufficient.     Id. 

iSBoyce  v.  Edwards,  29  U.  S.  (4  Pet.)  Ill,  7  Law.  Ed.  22;  Henrietta 
Nat.  Bank  v.  State  Nat.  Bank,  80  Tex.  648,  16  S.  W.  321,  26  Am.  St. 
Rep.  773. 

i^Fowler  v.  Gate  City  Nat.  Bank,  88  Ga.  29,  13  S.  E.  831;  Kaufman  v. 
Barringer,  20  La.  Ann.  419;  Mechanics'  Bank  v.  Yager,  62  Miss.  529; 
Wheeler  v.  Webster,  1  E.  D.  Smith  (N.  Y.)  1;  Spear  v.  Pratt,  2  Hill  (N. 
Y.)  582,  38  Am.  Dec.  600. 

15  Spear  v.  Pratt,  2  Hill  (N.  Y.)  582,  38  Am.  Dec.  600;  Vanstrum  v. 
Liljengren,  37  Minn.  191,  33  N.  W.  555;  Cortelyou  v.  Maben,  22  Neb. 
697,  36  N.  W.  159,  3  Am.  St.  Rep.  284. 

16  Spear  v.  Pratt,  2  Hill  (N.  Y.)  582,  38  Am.  Dec.  600. 


§  94  IMPLIED  ACCEPTANCE.  I35 

as  dishonored  if  this  is  refused.^^  This  section  is  not  confined  to 
sight  bills,  but  seems  to  be  applicable  to  all  bills  of  exchangers 
An  acceptance  written  on  a  paper  other  than  the  bill  itself  binds 
the  acceptor  only  in  favor  of  one  to  whom  it  is  shown,  and  who, 
on  the  faith  thereof,  receives  the  bill  for  value.^^ 

Implied  Acceptance. 

§  94.  Where  a  drawee  to  whom  a  bill  is  delivered  for  acceptance 
destroys  the  same,  or  refuses  within  twenty-four  hours 
after  the  delivery,  or  within  such  other  period  as  the 
holder  may  allow,  to  return  the  bill  accepted  or  nonac- 
cepted  to  the  holder,  he  will  be  deemed  to  have  accepted 
the  same. 

An  exception  to  the  rule  that  the  acceptance  must  be  in  writing 
and  signed  by  the  drawee  is  found  in  the  rule  that,  if  a  drawee  to 
whom  a  bill  is  delivered  for  acceptance  destroys  it,  or  refuses 
within  twenty-four  hours  after  such  delivery,  or  within  such  other 
period  as  the  holder  may  allow,  to  return  the  bill  accepted 
or  not  accepted,  he  will  be  deemed  to  have  accepted  it.^o    Under 

17  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La.. 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl,  Or., 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  133);  Ariz.  (§  3436);  111! 
(§  132);  Kan.  (§  140);  Md.  (§  152);  Mich.  (§  135);  Neb.  (§  132);  N.  Y. 
(§  221);  Ohio  (§  3175x);  R.  I.  (§  141);  Wis.  (§  1680g). 

18  National  Park  Bank  v.  Saitta,  127  App.  Div.  624,  111  N.  Y.  Supp.  927. 

19  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La.. 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or.,' 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  134);  Ariz.  (§  3437);  111! 
(§  133);  Kan.  (§  141);  Md.  (§  153);  Mich.  (§  136);  Neb.  (§  133);  N.  Y. 
(§  222);  Ohio  (§  3175  y);  R.  I.  (§  142);  Wis.  (§  1680  h). 

See,  also,  Fairchild  v.  Feltman,  32  Hun  (N.  Y.)  398. 

Acceptance  may  be  made  by  telegraph.  In  re  Armstrong,  41  Fed.  381; 
Garrettson  v.  North  Atchison  Bank,  39  Fed.  163,  7  L.  R.  A.  428;  Hen- 
rietta Nat.  Bank  v.  State  Nat.  Bank,  80  Tex.  648,  16  S.  W.  321,  26  Am.  St. 
Rep.  m. 

20  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho.  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or., 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  137);  Ariz.  (§  3440);   111. 


136  ACCEPTANCE  OF  BILLS.  §  94 

the  great  weight  of  authority  as  it  existed  prior  to  the  negotiable 
instruments  law,  mere  retention  of  a  bill  could  not  amount  to  an 
implied  acceptance,  in  the  absence  of  contract  or  settled  course 
of  dealing  between  the  parties  to  the  contrary.  This  rule  is  that 
of  the  negotiable  instruments  law,  and  under  it  some  affirmative 
tortious  act  on  the  part  of  the  drawee  is  required,  and  a  mere 
retention  of  the  instrument  beyond  the  proper  time  will  not 
amount  to  an  acceptance.^^  In  speaking  of  this  general  question 
the  "Wisconsin  supreme  court  has,  in  a  case  dealing  with  a  non- 
negotiable  bill  of  exchange,  used  the  following  language:  "Upon 
the  question  of  law  as  to  when  implied  or  constructive  accept- 
ance takes  place,  the  authorities  are  reasonably  clear  and  approx- 
imately unanimous.  Upon  delivery  for  acceptance,  the  drawee  is 
not  bound  to  act  at  once.  He  has  a  right  to  a  reasonable  time — 
usually  twenty-four  hours — to  ascertain  the  state  of  accounts  be- 
tween himself  and  the  drawer,  and  until  expiration  of  that  time  the 
holder  has  no  right  to  demand  an  answer,  nor  without  categorical 
answer,  to  deem  the  bill  either  accepted  or  dishonored ;  not  ac- 
cepted, because  of  the  right  of  the  drawee  to  consider  before  he 
binds  himself;  not  dishonored  because  both  drawer  and  drawee 
have  the  right  that  their  paper  be  not  discredited  during  such 
period  of  investigation.  After  the  expiration  of  that  reasonable 
time  the  holder  has  a  right  to  know  whether  the  drawee  assumes 

(§  136);  Kan.  (§  144);  Md.  (§  156);  Mich.  (§  139);  Neb.  (§  136);  N.  Y. 
(§  225);  Ohio  (§  3176  a);  R.L  (§  145);  Wis.  (§  1680  k). 

21  This  construction  of  the  rule  is  expressly  recognized  by  the  nego- 
tiable instruments  law  as  adopted  in  Wisconsin.  Negotiable  Inst.  Law, 
§  1680  k. 

Colorado  Nat.  Bank  v.  Boettcher,  5  Colo.  185,  40  Am.  Rep.  142;  Hol- 
brook  V.  Payne,  151  Mass.  383,  24  N.  E.  210,  21  Am.  St.  Rep.  456;  Short 
V.  Blount,  99  N.  C.  49,  5  S.  E.  190;  Matteson  v.  Moulton,  79  N.  Y.  627. 
This  decision  was  based  on  1  Rev.  St.  N.  Y.  p.  769,  §  11,  which  is  identical 
with  the  rule  of  the  negotiable  instruments  laws  given  in  the  text.  The 
Missouri  statute  (Rev.  St.  §  724)  is  the  same,  and  has  been  construed 
m  the  same  way.  Dickenson  v.  Marsh,  57  Mo.  App.  566.  See  Austin  v. 
Papanti,  197  Mass.  584,  83  N.  E.  1088,  where  one  turned  an  order  over  to 
the  drawee  who  had  funds  to  pay  the  same,  and  the  court  held  there 
was  no  acceptance,  saying  "that  he  could  have  accepted  the  order  if  he 
had  chosen  and  that  he  had  money  enough  to  pay  is  not  enough." 


§  94  IMPLIED  ACCEPTANCE.  Vol 

liability  to  him  by  acceptiug,  and,  if  not,  lie  has  a  right  to  a  re- 
turn of  the  document,  so  that  he  may  protest  or  otherwise  proceed 
to  preserve  his  rights  against  the  drawer.  The  concensus  of  au- 
thority is,  however,  that  the  duty  rests  on  the  holder  to  demand 
either  acceptance  or  return  of  the  bill,  and  that  mere  inaction 
on  the  part  of  the  drawee  has  no  effect.  After  the  expiration  of 
this  time  for  investigation,  the  drawee  may  by  retention  of  the 
bill,  accompanied  by  other  circumstances,  become  bound  as  an 
acceptor ;  not,  however,  by  mere  retention.  There  seem  to  be  two 
classes  of  conduct  recognized  by  the  authorities  as  charging  the 
drawee — one  purely  contractual,  as  where  the  retention  is  ac- 
companied by  such  custom,  promise  or  notification  as  to  warrant 
the  holder  to  the  knowledge  of  the  drawee,  in  understanding  that 
the  retention  declares  acceptance ;  the  other,  where  the  conduct 
of  the  drawee  is  substantially  tortious,  and  amounts  to  a  conver- 
sion of  the  bill.  This  is  the  phase  of  conduct  whicli  our  negotiable 
instruments  law  has  undertaken  to  define  and  limit  as  refusal  (not 
mere  neglect)  to  return  the  bill  or  destruction  of  it;  reiterating 
the  common-law  rule  that  mere  retention  of  the  bill  is  not  ac- 
ceptance. The  doctrine  of  constructive  acceptance  is  based  on 
the  general  principles  of  estoppel.  If  the  conduct  of  the  drawee 
will  prejudice  the  existing  rights  of  the  holder,  unless  it  means 
acceptance,  and  the  drawee  has  knowledge  of  such  fact,  he  is 
estopped  to  deny  the  only  purpose  which  could  render  his  con- 
duct innocuous;  namely,  the  acceptance  of  the  bill.  This  under- 
lying principle  suggests  the  reasons  for  many  of  the  limitations 
upon  the  implication  of  acceptance  from  conduct;  as,  for  example, 
that  such  implication  arises  only  when  the  bill  is  presented  for 
acceptance,  and  that  no  one  but  the  holder  (payee  or  indorsee) 
can  make  such  technical  presentment.  Only  when  the  drawee 
knows  that  acceptance  is  expected  would  he  suppose  that  his  con- 
duct can  lead  to  a  belief  that  he  does  accept.  Only  when  the  pre- 
sentment is  by  the  holder,  whose  conduct  and  rights  must  be  af- 
fected by  acceptance  or  refusal,  is  the  drawee  charged  by  the 
strict  lules  of  the  law  merchant  with  notice  that  his  conduct  may 
so  injuriously  affect  the  person  delivering  the  bill  to  him. "22    In 

22  Westbcrg  V.  Chicago  Lumber  &  Coal  Co,  117  Wis.  589,  94  N.  W.  572 


138  ACCEPTANCE  OF  BILLS.  §  95 

apparent  contradiction  to  the  plain  import  of  the  words  of  the 
statute,  some  courts  have  held  that,  under  the  statute,  a  mere  re- 
tention is  sufficient  to  constitute  acceptance.^^  In  one  of  these 
the  following  language  is  used:  "It  is  apparent,  we  think,  that 
in  the  enactment  of  this  section,  the  legislature  regarded  the 
presentation  for  acceptance  as  a  demand  for  acceptance,  which, 
when  the  bill  is  retained  by  the  drawee,  implies  a  demand  for 
its  return  within  the  time  specified,  and  that,  therefore,  the  neglect 
or  failure  to  return  is  a  refusal  to  return  the  bill."  ^^  Both  of  the 
cases  cited  as  holding  contrary  to  what  is  believed  to  be  the  cor- 
rect view  were  cases  of  checks  and  might,  perhaps,  be  justified 
on  the  theory  that  retention  is  contrary  to  a  settled  business  cus- 
tom and  hence  an  acceptance;  but  to  hold  bare  retention  an  ac- 
ceptance is  believed  erroneous.  But  a  retention  of  the  instrument, 
coupled  with  a  written  statment  by  the  drawee,  in  a  letter  to  the 
payee,  that  it  "will  be  disposed  of  in  some  way  or  other  when  I 
am  there,"  amounts  to  an  acceptance.^^ 

Medium  of  Payment. 

§  S5.  The  acceptance  must  not  provide  that  the  drawee  will  per- 
form his  promise  by  any  other  means  than  the  payment  of 
money. 

Inasmuch  as  the  negotiable  instruments  law  requires  a  bill  of 
exchange  to  pay  a  sum  certain  in  money,^^  the  subsequent  pro- 
vision that  the  acceptance  of  the  bill  must  not  express  that  the 
drawee  will  perform  his  promise  by  any  other  means  than  the 
payment  of  money^'^  is  only  logical. 

23Wisner  v.  First  Nat.  Bank,  220  Pa.  121,  68  Atl.  955;  State  Bank  v. 
Weiss,  46  Misc.  93,  91  N.  Y.  Supp.  276. 

24Wisner  v.  First  Nat.  Bank,  220  Pa.  121,  68  Atl.  955. 

25  Hough  V.  Loring,  41  Mass.  (24  Pick.)  254. 

26  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or., 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  126);  Ariz.  (§  3429);  111. 
(§  125);  Kan.  (§  133);  Md.  (§  145);  Mich.  (§  128);  Neb.  (§  125);  N.  Y. 
(§  210);  Ohio  (§  3175q);  R.  L  (§  134);  Wis.  (§  1680). 

27  Neg.   Inst.   Laws    Colo.,   Conn.,   D.    C,   Fla.,    Idaho,   Iowa,   Ky.,   La., 


§  97  CONSIDERATION   PRESUMED.  139 

Consideration. 

§  96.    An  acceptance  is  presumed  to  have  been  based  on  a  val- 
uable consideration. 

§  97.    Value  is  any  consideration  sufficient  to  support  a  simple 
contract,  including  an  antecedent  or  precedent  debt. 

Consideration  for  acceptance. 

It  is  presumed  that  an  acceptance  was  based  on  a  sufficient  and 
valuable  consideration,^^  for  the  acceptance,  of  itself,  operates  as 
an  admission  that  the  drawee  has  funds  of  the  drawer  in  his 
hands.29  This  presumption  may  be  rebutted  by  evidence  as  to 
the  relations  and  dealings  of  the  parties.^^  Value  is  any  consid- 
eration sufficient  to  support  a  simple  contract.  A  present  existing 
debt  of  the  drawee  to  the  drawer  is  a  sufficient  consideration  for 
an  acceptance  by  the  former,^!  and  so  is  a  debt  due  from  the 

Mass.,  Mo.,  Mont,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or., 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  132);  Ariz.  (§  3435);  111. 
(§  131);  Kan.  (§  139);  Md.  (§  151);  Mich.  (§  134);  Neb.  (§  131);  N.  Y. 
(§  220);  Ohio  (§  3175  w);  R.  I.  (§  140);  Wis.  (§  1680  f). 

28  Mechanics'  Bank  v.  Livingston,  33  Barb.  (N.  Y.)  458;  National  Park 
Bank  v.  Saitta,  127  App.  Div.  624,  111  N.  Y.  Supp.  927. 

Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La. 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or., 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  24);  Ariz.  (§  3327);  111. 
(§  24);  Kan.  (§  31);  Md.  (§  43);  Mich.  (§26);  Neb.  (§  24);  N.  Y.  (§  50); 
Ohio  (§  3171  w);  R.  I.  (§  32);  Wis.  (§  1675-50). 

29  State  Bank  v.  Clark,  1  Hawks  (N.  C.)  36;  Gillilan  v.  Myers,  31  111. 
525;  Kendall  v.  Galvin,  15  Me.  131,  32  Am.  Dec.  141;  Byrd  v.  Bertrand, 
2  Eng.  (Ark.)  321;  Alvord  v.  Baker,  9  Wend.  (N.  Y.)  323;  Richardson  v'. 
Carpenter,  46  N.  Y.  660;  Raborg  v.  Peyton,  15  U.  S.  (2  Wheat.)  385,  4 
Law.  Ed.  144. 

30  Parks  V.  Nichols,  20  111.  App.  143;  Hidden  v.  Waldo,  55  N.  Y.  295. 

31  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or., 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  25);  Ariz.  (§  3328);  111. 
(§  25);  Kan.  (§  32);  Md.  (§  44);  Mich.  (§  27);  Neb.  (§  25);  N.  Y.  (§  51); 
Ohio  (§  3171  x);  R.  I.  (§  33);  Wis.  (§  1675-51). 

First  Nat.  Bank  v.  Snell,  32  Iowa,  167;  Fisher  v.  Beckwith,  19  Vt.  31 
46  Am.  Dec.  174. 


140  ACCEPTANCE  OF  BILLS.  §  98 

drawee  to  a  third  person.32  A  shipment  of  merchandise  by  the 
debtor  to  the  drawee  is  a  sufficient  consideration  for  an  accept- 
ance by  the  latter  of  an  order  in  favor  of  the  creditor  for  the 
proceeds  of  the  goods,^^  and  the  transfer  to  the  acceptor  of  a  bill 
of  lading  is  a  sufficient  consideration  for  his  acceptance,  though 
the  cargo  covered  by  the  bill  was  practically  worthless.^*  Serv- 
ices rendered  by  plaintiff  at  the  request  of  defendant,  in  procur- 
ing the  withdrawal  of  a  contractor's  objections  to  plaintiff's  ac- 
count for  materials  furnished  for  a  building  on  which  defendant 
was  loaning  money,  is  a  sufficient  consideration  for  an  acceptance 
by  defendant  of  an  order  from  the  contractor  for  the  value  of  such 
materials;  35  and  forbearance  to  file  a  mechanic's  lien  against  a 
building  belonging  to  the  drawer  is  a  sufficient  consideration  for 
an  acceptance  by  the  drawee.=^^  As  between  the  payee  and  the  ac- 
ceptor, the  acceptor  cannot  set  up  a  want  of  consideration,^^  and 
one  of  several  joint  acceptors  cannot  defeat  a  recovery  as  to  him- 
self by  showing  that  his  acceptance  was  for  accommodation,  and 
was  made  after  the  others  had  accepted.^^ 


Time  of  Acceptance. 

§  98.  The  drawee  is  allowed  twenty-four  hours  after  presentment 
in  which  to  decide  whether  or  not  he*will  accept  the  bill; 
but  the  acceptance,  if  given,  dates  as  of  the  date  of  presen- 
tation. 

What  constitutes  a  reasonable  time  after  presentment  for  the 
drawee  to  decide  on  acceptance  or  not  is  now  definitely  fixed  by 

32  Arnold  v.  Sprague,  34  Vt.  402. 

33  Olds  Wagon-Works  v.  Coombs,  124  Ind.  62,  24  N.  E.  589. 

34  Kelly  V.  Lynch,  22  Cal.  661. 

35  Nesbit  V.  Bendheim,  15  N.  Y.  Supp.  300. 

36  Flanagan  v.  Mitchell,  16  Daly,  223,  10  N.  Y.  Supp.  234. 
37Townsley  v.  Sumrall,  27  U.  S.   (2  Pet.)   170,  7  Law.  Ed.  68;  Iselin  v. 

Chemical  Nat.  Bank,  16  Misc.  437,  40  N.  Y.  Supp.  388;  Grant  v.  Ellicott, 
7  Wend.  (N.  Y.)  227;  Meyer  v.  Beardsley,  30  N.  J.  Law,  236. 
ssMcNabb  v.  Tally,  27  La.  Ann.  640. 


§  101  INSERTION  OF  DATE.  141 

the  negotiable  instruments  laws  at  twenty-four  hours.^^    The  ac- 
ceptance, when  given,  dates  as  of  the  day  of  presentment.**^ 

§  99.  Where  the  acceptance  of  an  instrument  payable  at  a 
fixed  period  after  sight  is  undated,  any  holder  may  in- 
sert therein  the  true  date  of  issue  or  acceptance  and  the 
instrument  will  be  payable  accordingly. 

§  100.  The  insertion  of  a  wrong  date  does  not  avoid  the  instru- 
ment in  the  hands  of  a  holder  in  due  course. 

§  101.  Where  an  acceptance  is  dated,  such  date  is  deemed  prima 
facie  correct. 

Insertion  of  date. 

By  express  enactment,  where  the  acceptance  of  an  instrument 
payable  at  a  fixed  period  after  sight  is  undated,  any  holder  may 
insert  therein  the  true  date  of  issue  or  acceptance,  and  the  in- 
strument will  be  payable  accordingly.*!  The  insertion  of  a  wrong 
date  does  not  avoid  the  instrument  in  the  hands  of  a  subsequent 
holder  in  due  course ;  but,  as  to  him,  the  date  so  inserted  is  to  be 
regarded  as  the  true  date.*^  The  language  of  the  act  would  seem 
to  warrant  the  construction  that  the  rule  would  be  otherwise  as 

39  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or., 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  136) ;  Ariz.  (§  3439) ;  111. 
(§  135);  Kan.  (§  143);  Md.  (§  155);  Mich.  (§  138);  Neb.  (§  135);  N.  Y. 
(§  224);  Ohio   (§  3176);   R.   I.    (§  144);   Wis.   (§  1680  j). 

Heretofore  in  Massachusetts  and  Rhode  Island  the  drawee  had  until 
two  o'clock  of  the  day  following  presentment  for  acceptance.  Pub.  St. 
Mass.  1882,  c.  77,  §  17;  Gen.  St.  R.  I.  c.  166,  §  5. 

*o  Same  sections  of  negotiable  instruments  laws  as  last  above  cited. 

*i  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or., 
Pa.,  Tenn.,  Utah, 'Va.,  Wash.,  W.  Va.,  Wyo.  (§  13);  Ariz.  (§  3316);  111 
(§  13);  Kan.  (§  20);  Md.  (§  32);  Mich.  (§  15);  Neb.  (§  13);  N.  Y.  (§  32); 
Ohio  (§  31711);  R.  I.  (§  21);  Wis.  (§  1675-13). 

*2  Same  sections  of  negotiable  instruments  laws  as  last  above  cited. 


142  ACCEPTANCE  OF  BILLS.  §  102 

to  one  becoming  a  party  prior  to  the  completion  of  the  instru- 
ment.*^ 

Date  prima  facie  correct. 

By  the  express  provisions  of  the  act  when  an  acceptance  is 
dated,  such  date  is  prima  facie  deemed  the  true  date  of  the  ac- 
ceptance.** 

General  and  Qualified  Acceptance. 

§  102.  An  acceptance  is  either  general  or  qualified.  A  general 
acceptance  assents  without  qualification  to  the  order  of 
the  drawer.  A  qualified  acceptance  in  express  terms  va- 
ries the  effect  of  the  bill  as  drawn. 

An  acceptance  of  the  order  of  the  drawer  without  qualification, 
and  according  to  the  tenor  of  the  bill,  is  a  general  acceptance.*^ 

43  Same  sections  negotiable  instruments  laws  last  above  cited,  con- 
strued with  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky., 
La.,  Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or., 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§§  14,  124,  125);  Ariz.  (§§ 
3317,  3427,  3428);  111.  (§§14,  123,  124);  Kan.  (§§  21,  131,  132);  Md.  (§§ 
33,  143,  144);  Mich.  (§§16,  126,  127);  Neb.  (§§  14,  123,  124);  N.  Y.  (§§  33, 
205,  206);  Ohio  (§§3171  m,  3175  o,  3175  p);  R.  I.  (§§  22,  132,  133);  Wis. 
(§§  1675-14,  1679-5,  1679-6).  But  see  Neg.  Inst.  Laws  Colo.,  Conn.,  D. 
C,  Fla.,  Idaho,  Iowa,  Ky.,  La.,  Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J., 
N.  M.,  N.  C,  N.  D.,  Okl.,  Or.,  Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va., 
Wyo.  (§  6);  Ariz.  (§  3309);  111.  (§  6);  Kan  (§  13);  Md.  (§  25);  Mich. 
(§  8);  Neb.  (§  6);  N.  Y.  (§  25);  Ohio  (§  3171  e);  R.  I.  (§  14);  Wis.  (§ 
1675-6). 

4*  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl,  Or., 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  11);  Ariz.  (§  3314);  111. 
(§  11);  Kan.  (§  18);  Md.  (§  30);  Mich.  (§  13);  Neb.  (§  11);  N.  Y.  (§  30); 
Ohio  (§  3171  j);  R.  I.  (§  19);  Wis.  (§   1675-11). 

See,  also,  ante,  chapter  III,  §  16. 

45  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or., 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  139);  Ariz.  (§  3442);  111. 
(§  138);  Kan.  (§  146);  Md.  (§  158);  Mich.  (§  141);  Neb.  (§  138);  N.  Y. 
(§  227);  Ohio  (§  3176c);  R.  I.  (§  147);  Wis.  (§  1680m). 
Acceptance  qualified  in  form  construed  to  be  general,  see  post,  ^  103. 


§  103  QUALIFIED  ACCEPTANCE.  143 

Any  acceptance  which  varies  the  effect  of  the  bill  as  drawn  is 
a  qualified  acceptance.^^ 

Qualified  Acceptance. 

§  103.    An  acceptance  is  qualified  which  is: 

1.  Conditional,  that  is  to  say,  which  makes  payment 

by  the  acceptor  dependent  on  the  fulfillment  of  a 
condition  therein  stated; 

2.  Partial,  that  is  to  say,  an  acceptance  to  pay  part  only 

of  the  amount  for  which  the  bill  is  drawn; 

3.  Local,  that  is  to  say,  an  acceptance  to  pay  only  at  a 

particular  place; 

Qualification. — But  an  acceptance  to  pay  at  a  par- 
ticular place  is  a  general  acceptance,  unless  it  ex- 
pressly states  that  the  bill  is  to  be  paid  there  only 
and  not  elsewhere; 

4.  Qualified  as  to  time; 

5.  The  acceptance  of  some  one  or  more  of  the  drawees, 

but  not  of  all. 

The  most  common  form  of  qualified  acceptance  is  the  condi- 
tional acceptance,  which  makes  payment  by  the  acceptor  depend- 

46  Same  sections  of  negotiable  instruments  laws  last  above  cited.  The 
provisions  of  the  English  Bills  of  Exchange  Act  1882  (45  and  46  Vict.  c.  61, 
§  19)  are  the  same  as  those  of  the  negotiable  instruments  laws,  and  un- 
der them  it  has  been  held  that  where  a  bill  was  drawn  by  L.  D.  F.  pay- 
able "to  the  order  of  L.  D.  F.,"  and  the  drawees  struck  out  the  word 
''order,"  and  accepted  "in  favor  of  L.  D.  F.  only,  payable  at  the  Alliance 
Bank,  London,"  the  acceptance  did  not  vary  the  effect  of  the  bill  as 
drawn,  and  hence  was  not  a  qualified  acceptance,  but  was  a  general  ac- 
ceptance. The  court  in  this  case  said  that  the  words  "accepted  in  favor 
of  L.  D.  F."  indicated  an  acceptance  "of  a  bill  of  which  F.  is  the  drawer 
or  payee,"  and  that  the  mercantile  effect  of  the  bill  was  not  altered  by 
adding  the  word  "only,"  as  it  indicated  merely  "that  the  acceptance  is 
of  a  bill  of  which  F.  is  the  only  drawer."  Decroix,  Verley  et  Cie  v. 
Meyer  &  Co.,  25  Q.  B.  Div.  343. 


144  ACCEPTANCE  OF  BILLS.  §  103 

ent  on  the  fulfillment  of  a  condition  therein  stated.*^  An  accept- 
ance is  conditional  if  it  is  to  pay  ''according  to  contract,"  ^^  or  on 
the  completion  of  a  building  according  to  contract/''  or  to  pay 
when  in  funds^^o  or  out  of  a  particular  fund.^i  The  condition  mast 
be  espressed.52  Sometimes  an  acceptance  expressly  conditional 
in  form  is  not  such  in  fact,  but  is  an  absolute,  unqualified  ec- 
ceptance.53  The  condition  may  be  subsequently  waived  by  the  ac- 
ceptor,^^ 

Under  the  negotiable  instruments  acts,  an  acceptance  to  pay 
part  only  of  the  sum  named  in  the  bill,^^  or  one  which  is  speeific- 

47Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or., 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  141);  Ariz.  (§  3444);  111. 
(§  140);  Kan.  (§  148);  Md.  (§  160);  Mich.  (§  143);  Neb.  (§  140);  N.  Y. 
(§  229);   Ohio   (§  3176  e);   R.   I.    (§  149);  Wis.    (§  1680  o). 

Conditional  promise  to  accept,  see  ante,  §  113. 

48  Haseltine  v.  Dnnbar,  62  Wis.  162,  22  N.  W.  165. 

49Newhall  v.  Clark,  57  Mass.  (3  Cush.)  376,  50  Am.  Dec.  741;  Somers 
V.  Thayer,  115  Mass.  163;  Greene  v.  Duncan,  Z7  S.  C.  239,  15  S.  E.  956. 
But  see  Hughes  v.  Fisher,  10  Colo.  383,  15  Pac.  702. 

50  Campbell  v.  Pettengill,  7  Me.  126,  20  Am.  Dec.  349;  Hunt  v.  Williams, 
IS  R.  I.  595,  10  Atl.  645;  Owen  v.  Iglandor,  44  Tenn.  (4  Cold.)  15;  Law- 
rence V.  Phipps,  67  Plun,  61,  22  N.  Y.  Supp.  16. 

Acceptance  when  "in  funds"  means  cash  funds.  Campbell  v.  Petten- 
gill, 7  Me.  126,  20  Am.  Dec.  349. 

The  acceptor  is  liable  when  the  money  is  placed  to  his  credit,  though 
he  has  not  actually  received  it.  Wallace  v.  Douglas,  116  N.  C.  659,  21 
S.  E.  387.  He  must  pay  out  of  the  first  funds  of  the  drawer  that  he  re- 
ceives. Wintermute  v.  Post,  24  N.  J.  Law,  420;  Perry  v.  Harrington,  43 
Mass.  (2  Mete.)  368. 

5iFlanagan  v.  Mitchell,  16  Daly,  223,  10  N.  Y.  Supp.  23.4.  See,  also,  Rob- 
inson V.  Gray,  17  Misc.  341,  39  N.  Y.  Supp.  1066;  Hazelton  Mercantile  Co. 
V.  Union  Imp.  Co.,  143  Pa.  573,  22  Atl.  906. 

52  Cofifman  v.  Campbell,  87  111.  98;  Haines  v.  Nance,  52  111.  App.  406. 

53  Cowan  V.  Hallack,  9  Colo.  572,  13  Pac.  700;  Brabazon  v.  Seymiour,  42 
Conn.  551,  where  a  conditional  acceptance  was  held  to  become  absolute 
on  fulfillment  of  the  condition. 

54  Hough  V.  Loring,  41  Mass.  (24  Pick.)  254. 

The  acceptor  cannot,  after  defeating  the  condition  by  his  own  acts,  set 
it  up  as  a  defense  to  an  action  on  the  acceptance.  Risley  v.  Smith,  64 
N.  Y.  576;  Herter  v.  Goss  &  Edsall  Co.,  57  N.  J.  Law,  42,  30  Atl.  252. 

55  Neg.  Inst.  Laws   Colo.,   Conn.,   D.   C,   Fla.,   Idaho,   Iowa,   Ky.,   La., 


§104  QUALIFIED  ACCEPTANCE.  145 

ally  qualified  or  limited  as  to  time,^^  or  an  acceptance  by  one  or 
more  of  several  drawees,  less  than  all,"  are  qualified  acceptances, 
as  is  an  acceptance  to  pay  only  at  a  particular  place.^^  The  vital 
word  in  this  last  clause  is  "only,"  for  whatever  may  have  been 
the  rule  heretofore,  it  is  now  provided  by  the  negotiable  instru- 
ments laws  that  an  acceptance  to  pay  at  a  particular  place  is  a 
general  acceptance,  unless  it  expressly  states  that  the  bill  is  to 
be  paid  there  only,  and  not  elsewhere.^^ 

§  104.    The  holder  may  refuse  to  take  a  qualilied  acceptance, 
and  if  he  does  not  obtain  an  unqualified  acceptance  may 
treat  the  bill  as  dishonored  by  nonacceptance.     Where 
a  qualified  acceptance  is  taken,  the  drawer  and  indorsers 
are  discharged  from  liability  on  the  bill,  unless  they  have 
expressly  or  impliedly  authorized  the  holder  to  take  a 
qualified    acceptance,    or    subsequently    assent    thereto. 
When  the  drawer  or  indorser  receives  notice  of  a  quali- 
fied acceptance,  he  must,  within  a  reasonable  time,  ex- 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Old.,  Or., 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  141);  Ariz.  (§  3444);  111. 
(§  140);  Kan.  (§  148);  Md.  (§  160);  Mich.  (§  143);  Neb.  (§140);  N.  Y. 
(§  229);  Ohio  (§  3176  e);  R.  I.   (§  149);  Wis.  (§  1680  o). 
Phillips  V.  Frost,  29  Me.  V.    But  see  Peterson  v.  Hubbard,  28  Mich.  197. 
56  Subdivision  4,  same  sections  of  negotiable  instruments  laws  as  last 
above  cited. 
Vanstrum  v.  Liljengren,  37  Minn.  191,  33  N.  W.  555. 

67 Subdivision  5,  same  sections  of  negotiable  instruments  laws  3«  last 
above  cited. 

58  Subdivision  3,  same  sections  of  negotiable  instruments  law^s  as  las-i 
above  cited. 

Wallace  v.  McConnell,  38  U.  S.  (13  Pet.)  136,  10  Law.  Ed.  95;  Bank  of 
U.  S.  v.  Smith,  24  U.  S.  (11  Wheat.)   172,  6  Law.  Ed.  443. 

59Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or., 
Pa.,  Tenn.,  Utah;  Va.,  Wash.,  W.  Va.,  W^o.  (§  140);  Ariz.  (§  3443);  111. 
(§  139);  Kan.  (§  147);  Md.  (§  159);  Mich.  (§  142);  Neb.  (§  139);  N.  Y. 
(§  228);  Ohio  (§  3176  d);  R.  I.  (§  148);  Wis.  (§  1680  n). 

Except  as  qualified  by  statutory  enactment,  the  English  rule  was  dif- 
ferent.    Rome  v.  Young,  2  Brod.  &  B.  165. 

Opp. — Sel. — 10 


146  ACCEPTANCE  OF  BILLb.  §  105 

press  his  dissent  to  the  holder,  or  he  will  be  deemed  to 
have  assented  thereto. 

The  holder  has  a  right  to  a  general  "unqualified  acceptance  by 
the  drawee,  and  may  refuse  to  take  a  qualified  acceptance,  and 
may  treat  the  bill  as  dishonored  by  nonacceptance  if  he  does  not 
obtain  an  unqualified  acceptance.^°  Unless  the  drawer  and  in- 
dorsers  have  expressly  or  impliedly  authorized  or  subsequently 
assented  to  the  taking  of  a  qualified  acceptance,  they  are  dis- 
charged from  liability  in  case  one  is  taken  f^  but,  if  a  drawer  or 
indorser  is  notified  of  a  qualified  acceptance,  he  must  express  his 
dissent  to  the  holder  within  a  reasonable  time,  or  he  will  be 
deemed  to  have  assented  to  such  acceptance.^^  In  determining 
what  is  a  "reasonable  time,"  regard  is  to  be  had  to  the  nature 
of  the  instrument,  the  usage  of  trade  or  business,  if  any,  and  the 
facts  of  the  particular  case.^^ 

Incomplete,  Overdue  Paper  and  Bn.LS  Drawn  in  Sets. 

§  105.  A  bill  may  be  accepted  before  it  has  been  signed  by  the 
drawer,  or  while  otherwise  incomplete,  or  v/hen  it  is  over- 
due, or  after  it  has  been  dishonored  by  a  previous  refusal 
to  accept,  or  by  nonpayment.  But  when  a  bill  payable 
after  sight  is  dishonored  by  nonacceptance  and  the  drawee 
subsequently  accepts  it,  the  holder,  in  the  absence  of  any 
different  agreement,  is  entitled  to  have  the  bill  accepted 
as  of  the  date  of  the  first  presentment. 

A  bill  may  be  accepted  before  it  is  signed  by  the  drawer,  or 
while  otherwise  incomplete,  or  when  it  is  overdue,  or  after  it  has 

eoNeg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or.. 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  142);  Ariz.  (§  3445);  111. 
(§  141);  Kan.  (§  149);  Md.  (§  161);  Mich.  (§  144);  Neb.  (§  141);  N.  Y. 
(§  230);  Ohio   (§  3176  f);  R.  I.   (§  ISO);  Wis.   (§  1680  p). 

Shakelford  v.  Hooker,  54  Miss.  716. 

61  Same  sections  of  negotiable  instruments  laws  as  last  above  cited. 

62  Same  sections  of  negotiable  instruments  laws  as  last  above  cited. 
63Neg.   Inst.   Laws   Colo.,   Conn.,  D.   C,   Fla.,  Idaho,   Iowa,   Ky.,   La., 


§  107  BILLS   IN   SETS.  147 

been  dishonored,  by  a  refusal  to  accept  or  pay.^^  This  is  in  ac- 
cordance with  the  common  law.^^  But  when  a  bill  payable  after 
sight  is  dishonored  by  nonacceptance,  and  the  drawee  subse- 
quently accepts  it,  the  holder,  in  the  absence  of  any  different 
agreement,  is  entitled  to  have  the  bill  accepted  as  of  the  date  of 
the  first  presentment.^^ 

§  106.  When  a  bill  is  drawn  in  sets,  the  acceptance  may  be 
written  on  any  part  and  it  must  be  written  on  one  part 
only. 

§  107.  If  the  drawee  accepts  more  than  one  part  and  such  ac- 
cepted parts  are  negotiated  to  different  holders  in  due 
course,  he  is  liable  on  every  such  part  as  if  it  were  a 
separate  bill. 

Where  a  bill  is  made  out  in  a  set,  the  acceptance  may  be  written 
on  any  part,  but  must  be  written  on  one  part  only.^''  But  if  the 
drawee  accept  more  than  one  part,  and  they  are  thereafter  nego- 
tiated to  different  holders  in  due  course,  the  drawee  is  liable  on 
each  part  accepted,  as  on  a  separate  bill.^^    Where  the  first  and 

Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or  , 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  193);  Ariz.  (§  3489);  111. 
(§  192);  Kan.  (§  4);  Md.  (§  16);  Mich.  (§  2);  Neb.  (§  191);  N.  Y.  (§  4); 
Ohio  (§  3178  b);  R.  I.  (§  4);  Wis.  (§  1675). 

6"!  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or., 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  138);  Ariz.  (§  3441);  111. 
(§  137);  Kan.  (§  145);  Md.  (§  157);  Mich.  (§  140);  Neb.  (§  137);  N.  Y. 
(§  226);  Ohio  (§  3176B);  R.  I.  (§  146);  Wis.  (§  1680  L). 

65  Harvey  v.  Cane,  34  Law  T.  (N.  S.)  64;  Spalding  v.  Andrews.  48  Pa. 
413;  Grant  v.  Shaw,  16  Mass.  344. 

66  Same  sections  of  negotiable  instruments  laws  as  last  above  cited. 

^'<  >Ieg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or., 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  181);  Ariz.  (§  3484);  111. 
(§  180);  Kan.  (§  188);  Md.  (§  200);  Mich.  (§  183);  Neb.  (§  180);  N.  Y. 
(§  313);  Ohio  (§  3177  r);  R.  I.  (§  189);  Wis.  (§  1681-38). 

68  Same  sections  of  negotiable  instruments  laws  as  last  above  cited. 

See,  also,  Bank  of  Pittsburgh  v.  Neal,  63  U.  S.  (22  How.)  96,  16  Law. 
Ed.  248. 


148  ACCEPTANCE  OF  BILLS.  §  lOS 

second  of  a  set  are  accepted,  the  drawer  is  liable  on  both,  if  he 
authorized  or  ratified  the  negotiation,  and  there  was  no  collusion 
between  the  acceptor  and  the  holders.^^ 

Certification, 

§  108.     A  bank  is  not  liable  to  the  holder  of  a  check  unless  and 
until  it  accepts  or  certifies  it. 

As  a  logical  outcome  of  the  rule  that  a  check  of  itself  does  not 
operate  as  an  assignment  of  any  part  of  the  funds  to  the  credit 
of  the  drawer  with  the  bank,"*^  the  negotiable  instruments  laws 
provide  that  the  bank  is  not  liable  to  the  holder  unless  and  until 
it  accepts  or  certifies  the  check.'^^ 

§  109.    Where  a  check  is  certified  by  the  bank  on  which  it  is 
drawn,  the  certification  is  equivalent  to  an  acceptance. 

The  certification  of  a  check  by  the  bank  on  which  it  is  drawn 
is  equivalent  to  an  aeceptance,"^  and,  in  general,  gives  rise  to  tlie 
same  rights  and  liabilities.''^ 

69  Wright  V.  McFall,  8  La.  Ann.  120. 

70  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or., 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  189);  Ariz.  (§  3487);  111. 
(§  188);  Kan.  (§  196);  Md.  (§  208);  Mich.  (§  191);  Neb.  (§  188);  N.  Y. 
(§  325);  Ohio  (§  3177  z);  R.  I.  (§  197);  Wis.  (§  1684-5). 

71  Same  sections  negotiable  instruments  laws  last  above  cited.  Balti- 
more &  O.  R.  Co.  V.  First  Nat.  Bank,  102  Va.  753,  47  S.  E.  837;  Van  Bus- 
kirk  V.  State  Bank  of  Rocky  Ford,  35  Colo.  142,  83  Pac.  778,  117  Am.  St. 
Rep.  182. 

"  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okla.,  Or., 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  187);  Ariz.  (§  3487);  111'. 
(§  186)  ;  Kan.  (§  194)  ;  Md.  (§  206)  ;  Mich.  (§  189)  ;  Neb.  (§  186)  ;  N.  Y 
(§  323);  Ohio  (§  3177  x)  ;  R.  I.   (§  195);  Wis.  (§  1684-3). 

First  Nat.  Bank  v.  Currie,  147  Mich.  72,  13  Det.  Leg.  N.  965,  110  N.  W. 
499,  118  Am.  St.  Rep.  537,  9  L.  R.  A.  (N.  S.)  698.  Admits  genuineness  of 
maker's  signature.  Adam  v.  Manufacturers'  &  Traders'  Nat.  Bank  63 
Misc.  403,  116  N.  Y.  Supp.  595.  i 

"  See  post,  chapter  XI,  §  153. 


§  112  CERTIFICATION.  U«J 

§  110.     The  certification  must  be  in  writing  signed  by  the  bark. 

While  at  common  law  au  oral  certification  or  acceptance  was 
good,"''  the  rule  has  been  changed  by  the  negotialjle  instruments 
law  which  requires  all  acceptances  to  be  in  writing  and  signed  by 
the  drawee.'^^ 

Effect  of  Certification  as  a  Release  from  Liability. 

§  111.  Where  the  drawer  procures  the  certification  of  a  checlr, 
he  still  remains  liable  thereon. 

§  112.  Where  the  holder  of  a  check  procures  it  to  be  accepted  or 
certified,  the  drawer  and  all  indorsers  are  discharged 
from  liability  thereon. 

Certification — By  drawer. 

Where  the  drawer  of  a  check  procures  its  certification  by  tlie 
bank,  he  still  remains  liable;'''^  and  the  same  rule  applies  if  the 

74  Farmers'  &  Merchants'  Bank  v.  Dunbier,  32  Neb.  487,  49  N.  W.  376. 
An  oral  promise  to  pay  by  a  drawee  bank,  in  which  the  drawer  has  no 

funds,  is  within  the  statute  of  frauds.    Morse  v.  Massachusetts  Nat.  Bank, 
Fed.  Cas.  No.  9,857.    See,  also,  cases  cited  in  note  8  of  this  chapter. 

A  promise  by  telegraph  to  pay  a  check  is  a  good  certification.  Hen- 
rietta Nat.  Bank  v.  State  Nat.  Bank,  80  Tex.  648,  16  S.  W.  321,  26  Am.  St. 
Rep.  773;  Wells  v.  Western  Union  Tel.  Co.  (Iowa)    123  N.  W.  371. 

75  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or., 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  132);  Ariz.  (§  3435);  111. 
(§  131);  Kan.  (§  139);  Md.  (§  151);  Mich.  (§  134);  Neb.  (§  131);  N.  Y. 
(§  220);   Ohio   (§  3175w);   R.  I.   (§  140);  Wis.   (§  1680f). 

Oral  acceptance  cannot  be  enforced.  Telephone  response  that  check 
was  good.  Van  Buskirk  v.  State  Bank  of  Rocky  Ford,  35  Colo.  142,  83 
Pac.  778,  117  Am.  St.  Rep.  182. 

See  ante,  this  chapter,  §  91. 

76  Minot  V.  Russ,  156  Mass.  458,  31  N.  E.  489,  32  Am.  St.  Rep.  472,  16 
L.  R.  A.  510;  Times  Square  Automobile  Co.  v.  Rutherford  Nat.  Bank 
(N.  J.  Err.  &  App.)  11  All.  479. 

See,  also,  Rounds  v.  Smith,  42  111.  245;  Brown  v.  Leckie,  43  111.  497; 
First  Nat.  Bank  v.  Whitman,  94  U.  S.  343,  29  Law.  Ed.  229;  Metropolitan 
Nat.  Bank  v.  Jones,  137  111.  417,  27  N.  E.  533;  Larsen  v.  Breenc,  12  Colo. 


150  ACCEPTANCE  OF  BILLS.  §  113 

certification  is  made  before  delivery  to  the  payee  though  at  the 
latter 's  request.'^^ 

Same — By  holder. 

But,  where  the  holder  obtains  the  certification,  the  drawer  and 
all  prior  indorsers  are  discharged  from  liability.'''^  Such  certifica- 
tion creates  a  new  contract  between  the  holder  and  the  drawee/^ 
and  the  holder  may  sue  the  party  certifying.^o 

Promise  to  Accept. 

§  113.  An  vinconditional  promise  in  writing  to  accept  a  bill  be- 
fore it  is  drawn  is  deemed  an  actual  acceptance  in  favor 
of  every  person  who,  upon  the  faith  thereof,  receives  the 
bill  for  value. 

An  unconditional  written  promise  to  accept  a  bill  before  it  is 
drawn  operates  as  an  acceptance  in  favor  of  every  person  who, 

480;  Andrews  v.  German  Nat.  Bank,  56  Tenn.  (9  Heisk.)  211,  24  Am. 
Rep.  300;  Oyster  &  Fish  Co.  v.  National  Lafayette  Bank,  51  Ohio  St.  106, 
36  N.  E.  833. 

77  Born  v.  First  Nat.  Bank,  123  Ind.  78,  24  N.  E.  173,  18  Am.  St.  Rep. 
312,  7  L.  R.  A.  442. 

78  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa  Ky.,  La.. 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or., 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  188);  Ariz.  (§  3487);  111. 
(§  187);  Kan.  (§  195);  Md.  (§  207);  Mich.  (§  190);  Neb.  (§  187);  N.  Y. 
(§  324);  Ohio  (§  3177  y);  R.  L  (§  196);  Wis.  (§  1684-4). 

Meuer  v.  Phenix  Nat.  Bank,  94  App.  Div.  331,  88  N.  Y.  Supp.  83;  First 
Nat.  Bank  of  Jersey  City  v.  Leach,  52  N.  Y.  350,  11  Am.  Rep.  708;  Thom- 
son V.  Bank  of  British  North  America,  82  N.  Y.  1;  Girard  Bank  v.  Bank 
of  Pennsylvania  Tp.,  39  Pa.  92,  80  Am.  Dec.  507;  First  Nat.  Bank  v.  Cur- 
rie,  147  Mich.  72,  13  Det.  Leg.  N.  965,  110  N.  W.  499,  118  Am.  St.  Rep. 
537,  9  L.  R.  A.  (N.  S.)  698;  Times  Square  Automobile  Co.  v.  Rutherford 
Nat.  Bank  (N.  J.  Err.  &  App.)    73  Atl.  479. 

79  First  Nat.  Bank  v.  Currie,  147  Mich.  72,  13  Det.  Leg.  N.  965,  110  N. 
W.  499,  11*8  Am.  St.  Rep.  537,  9  L.  R.  A.  (N.  S.)  698;  Times  Square  Auto- 
mobile Co.  V.  Rutherford  (N.  J.  Err.  &  App.)  Ti  Atl.  479. 

80  Meuer  v.  Phenix  Nat.  Bank,  94  App.  Div.  331,  88  N.  Y.  Supp.  83. 


§  113  PROMISE  TO  ACCEPT.  151 

on  the  faith  thereof,  receives  the  bill  for  valuc.^^  In  the  lan- 
guage of  Chief  Justice  j\Iarsliall:  "The  prevailing  inducement  for 
considering  a  promise  to  accept  or  an  acceptance  is  that  credit 
is  thereby  given  to  the  bill,"^-  and  this  credit  may  be  as  well 
imparted  to  the  bill  before  its  date  as  afterwards.^^ 

To  constitute  the  promise  an  acceptance,  the  bill  must  have 
been  taken  on  the  faith  thereof.^*  The  fact  that  it  is  so  taken 
constitutes  a  sufficient  consideration  for  the  promise  to  accept.^^ 

81  Neg.    Inst.   Laws    Colo.,   Conn.,   D.   C,    Fla.,   Idaho,   Iowa,   Ky.,   La., 

Mass.,  Mo.,   Mont.,  Nev.,   N.   H.,  N.  J.,  N.   M.,   N.  C,   N.   D.,   Okl.,   Or., 

Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  135);  Ariz.   (§  3438);  111. 

(§  134);  Kan.   (§  142);  Md.   (§   154);  Mich   (§  137);  Neb.   (§   134);  N.  Y. 

(§  223);  Ohio  (§  3175  z);  R.  I.  (§  143);  Wis.  (§  1680  i). 

As  to  what  constitutes  a  promise  to  accept,  see  North  Atchison  Bank 
V.  Garretson,  2  C.  C.  A.   145,  51   Fed.  168;   First  Nat.  Bank  v.   Clark,  61 

Md.  400,  48  Am.  Rep.  114;  Burke  v.  Utah  Nat.  Bank,  47  Neb.  247,  66  N. 
W.  295;  Merchants'  Nat.  Bank  of  Canada  v.  Griswold,  72  N.  Y.  472,  28 
Am.  Rep.  159;  Union  Bank  v.  Shea,  57  Minn.  180,  58  N.  W.  985. 

Under  the  Missouri  statute  (Rev.  St.  §  535),  which  is  the  same  as  the 
negotiable  instruments  laws  on  this  point,  it  has  been  held  that  a  letter 
from  the  drawer  to  the  acceptor  directing  him  to  send  a  renewal,  and 
draw  on  the  writer  at  sight  for  the  amount  of  the  first  bill  at  maturity, 
operated  as  an  actual  acceptance  of  the  sight  draft.  Adoue  v.  Fox,  30 
Mo.  App.  98.     See,  also,  Valle  v.  Cerre,  36  Mo.  575,  88  Am.  Dec.  161. 

Heretofore  an  oral  promise  to  accept  was  good.  Kelley  v.  Greenough, 
9  Wash.  659,  38  Pac.  158;  Williams  v.  Winans,  14  N.  J.  Law,  339. 

82  Coolidge  V.  Payson,  15  U.  S.  (2  Wheat.)  66,  4  Law.  Ed.  185.  The 
court  adds:  "This  court  is  of  opinion  that  a  letter  written  within  a  rea- 
sonable time  before  or  after  the  date  of  a  bill  of  exchange,  describing  it 
in  terms  not  to  be  mistaken,  and  promising  to  accept  it,  is,  if  shown  to 
the  person  who  afterwards  takes  the  bill  on  the  credit  of  the  letter,  a 
virtual  acceptance  binding  the  person  who  makes  the  promise."     Id. 

S3  Coolidge  v.  Payson,  15  U.  S.  (2  Wheat.)  66,  4  Law.  Ed.  185.  See, 
also,  Steman  v.  Harrison,  42  Pa.  49. 

8*  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or., 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  135);  Ariz.  (§  3438);  111. 
(§  134);  Kan.  (§  142);  Md.  (§  154);  Mich.  (§  137);  Neb.  (§  134);  N.  Y. 
(§  223);  Ohio  (§  3175  z);  R.  I.  (§  143);  Wis.  (§  1680  i). 

Bank  of  Morganton  v.  Hay,  143  N.  C.  326,  55  S.  E.  811. 

85  Pillans  V.  Van  Mierof,  3  Burrows,  1669. 


152  ACCEPTANCE  OF  BILLS.  §  113 

The  promise  to  accept  must  be  unconditional.^  A  written 
promise  to  pay  a  draft  "for  stock"  is  not  conditional,^'^  nor  is  a 
promise  to  accept  "on  the  terms  you  propose ;"^^  but  a  promise 
to  accept  drafts  against  "particularly  described  shipments"  is 
conditional,^^  and  so  is  a  promise  to  accept  an  order  if  the  order 
is  not  revoked.^*^ 

To  operate  as  an  acceptance,  the  promise  to  accept  a  bill  must 
describe  the  bill  sufficiently  for  identification,'-^^  and  one  who 
promises  in  advance  to  accept  a  bill  of  exchange  is  bound  upon 
such  promise  only  in  case  the  bill  in  its  terms  conforms  to  the 
terms  of  his  offer.^^  Thus,  a  telegraphic  offer  to  accept  and  pay 
a  draft  of  $2,000  is  not  an  acceptance  of  a  draft  for  that  amount 
"with  exchange  on  New  York."  ^^ 

86  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or., 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  135);  Ariz.  (§  3438);  111. 
(§  134);  Kan.  (§  142);  Md.  (§  154);  Mich.  (§  137);  Neb.  (§  134);  N.  Y. 
(§  223);  Ohio  (§  3175  z);  R.  L  (§  143);  Wis.  (§  1680  j). 

87  Coffman  v.  Campbell,  87  111.  98. 

88  Parker  v.  Greele,  2  Wend.  (N.  Y.)  545. 

89  Germania  Nat.  Bank  v.  Taaks,  101  N.  Y.  442,  5  N.  E.  76. 

90  Shaver  v.  W.  U.  Tel.  Co.,  57  N.  Y.  459. 

sinister  County  Bank  v.  McFarlan,  3  Denio  (N.  Y.)  553;  First  Nat. 
Bank  v.  Clark,  61  Md.  400,  48  Am.  Rep.  114;  Boyce  v.'  Edwards,  29  U.  S. 
(4  Pet.)  Ill,  7  Law.  Ed.  22. 

92  Lindley  v.  First  Nat.  Bank,  76  Iowa,  629,  41  N.  W.  381,  14  Am.  St. 
Rep.  254,  2  L.  R.  A.  709;  Brinkman  v.  Hunter,  73  Mo.  172,  39  Am.  Rep. 
492;  Ulster  County  Bank  v.  McFarlan,  5  Hill  (N.  Y.)  432;  Gates  v.  Parker, 
43  Me.  544;  Murdock  v.  Mills,  52  Mass.  (1  Mete.)  5. 

93  Lindley  v.  First  Nat.  Bank,  76  Iowa,  629,  41  N.  W.  381,  14  Am.  St. 
Rep.  254,  2  L.  R.  A.  709. 


CHAPTER  IX. 

ACCEPTANCE  OF  BILLS  OF  EXCHANGE  FOR  HONOR. 

§  114.  When  Permissible. 

§  115.  How  Made. 

§  116.  Construction  of. 

§  117.  Liability  of  Acceptor. 

§  118.  Parties  Liable  to. 

§  119.  Maturity  of  Bill  Payable  After  Sight. 

When  Permissible. 

§  114.  Any  person  not  already  liable  on  a  protested  bill  of  ex- 
change may,  before  its  maturity  and  with  the  consent  of 
the  holder,  accept  the  bill,  wholly  or  partially,  for  the 
honor  of  any  person  for  whose  account  the  bill  is  drawn. 

Where  a  bill  of  exchange  has  been  protested  for  dishonor  by 
nonaeceptance,  or  protested  for  better  security,  and  is  not  over- 
due, any  person,  not  being  a  party  already  liable  thereon,  may, 
with  the  consent  of  the  holder,  intervene  and  accept  the  bill 
supra  protest  for  the  honor  of  any  party  liable  thereon  or  for  the 
honor  of  the  person  for  whose  account  the  bill  is  drawn. ^  The 
acceptance  for  honor  may  be  for  part  only  of  the  sum  for  which 
the  bill  is  drawn ;  and,  where  there  has  been  an  acceptance  for 
honor  for  one  party,  there  may  be  a  further  acceptance  by  a 

1  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or., 
Pa.,  Tenn.,  Utah,  Va.,  Wa.sh.,  W.  Va.,  Wyo.  (§  161);  Ariz.  (§  3464);  111. 
(§  160);  Kan.  ($.168);  Md.  (§180);  Mich.  (§  163);  Neb.  (§  160);  N.  Y. 
(§  280)  ;  Ohio  (§  3176  y)  ;  R.  I.  (§  169)  ;  Wis.  (§  1681-18). 

The  word  "for"  between  the  words  "person"  and  "whose"  was  omitted 
from  the  original  draft  of  the  law  as  adopted  in  New  York,  but  was  sup- 
plied by  amendment.    Laws  1898,  c.  336,  §  28. 

153 


154  ACCEPTANCE    FOR    HONOR.  §115 

diflFerent  person  for  the  honor  of  another  party .2  An  acceptance 
for  honor  may  be  made  at  the  instance  of  and  under  the  guaranty 
of  the  drawee.^ 

How  Made. 

§  115.     An  acceptance  for  honor  must  be  in  writing,  and  signed 
by  the  acceptor,  and  indicate  its  character. 

An  acceptance  for  honor  supra  protest  must  be  in  writing,  and 
indicate  that  it  is  an  acceptance  for  honor,  and  must  be  signed 
by  the  acceptor  for  iionor.*  The  acceptor  should  be  particular  to 
state  for  whose  honor  he  accepts.^ 

Construction  of. 

§  116.    Unless  such  intent  is  expressly  negatived,  the  acceptance 
is  deemed  for  the  honor  of  the  drawer. 

Where  an  acceptance  for  honor  does  not  expressly  state  for 
whose  honor  it  is  made,  it  is  deemed  to  be  an  acceptance  for  the 
honor  of  the  drawer.^ 

Liability  of  Acceptor. 

§  117.     The  acceptor  for  honor  by  acceptance  engages  that  he  will 
on  due  presentment  pay  the  bill  according  to  the  terms  of 

2  Same  sections  of  negotiable  instruments  laws  as  last  above  cited. 

3Konig  V.  Bayard,  26  U.  S.  (1  Pet.)  250,  7  Law.  Ed.  558. 

*  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or., 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  162);  Ariz.  (§  3465);  111. 
(§  161);  Kan.  (§  169);  Md.  (§  181);  Mich.  (§  164);  Neb.  (§  161);  N.  Y. 
(§  281);  Ohio  (§  3176z);  R.  I.  (§  170);  Wis.   (§  1681-19). 

5  1  Daniel's  Negotiable  Inst.  (5th  Ed.)  p.  520,  §  523. 

6  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or., 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  163);  Ariz.  (§  3466);  111. 
(§  162);  Kan.  (§  170);  Md.  (§  182);  Mich.  (§  165);  Neb.  (§  162);  N.  Y. 
'§  282);  Ohio  (§  3177);  R.  I.  (§  171);  Wis.  (§  1681-20). 


§  118  ACCEPTOR'S  LIABILITY.  155 

the  acceptance,  provided  it  shall  not  have  been  paid  by 
the  drawee,  and  provided,  also,  that  it  shall  have  been 
duly  presented  for  payment  and  protested  for  nonpay- 
ment and  notice  of  dishonor  given  him. 

The  above  is  practically  the  language  of  the  negotiable  instru- 
ments laws  which  read  as  follows :  ' '  The  acceptor  for  honor  by 
such  acceptance  engages  that  he  will  on  due  presentment  pay 
the  bill  according  to  the  terms  of  his  acceptance,  provided  it  shall 
not  have  been  paid  by  the  drawee,  and  provided,  also,  that  it 
shall  have  been  duly  presented  for  payment  and  protested  for 
nonpayment,  and  notice  of  dishonor  given  to  him."''  It  will  thus 
be  seen  that  the  liability  of  an  acceptor  for  honor  is  conditional 
and  more  analogous  to  that  of  an  indorser  than  of  an  ordinary 
acceptor. 

§  118.  The  acceptor  for  honor  is  liable  to  the  holder  and  to  all 
parties  to  the  bill  subsequent  to  the  party  for  whose 
honor  he  has  accepted. 

Under  the  express  provisions  of  the  negotiable  instruments 
laws,  the  acceptor  for  honor  is  liable  to  the  holder  and  to  all 
parties  to  the  bill  subsequent  to  the  party  for  whose  honor  he  has 
accepted,^  and  upon  payment  may  be  relegated  to  the  rights  of 
the  party  for  whose  honor  he  accepts  as  against  prior  parties.® 


''  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or., 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  165)  ;  Ariz.  (§  3468)  ;  111. 
(§  164)  ;  Kan.  (§  172)  ;  Md.  (§  184)  ;  Mich.  (§  167)  ;  Neb.  (§  164)  ;  N.  Y. 
(§  284)  ;  Ohio  (§  3177  b)  ;  R.  I.  (§  173)  ;  Wis.  (§  1681-22). 

8  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont,  Nev.,  N.  H.,  N.  J..  N.  M.,  N.  C,  N.  D.,  Okl.,  Or., 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  164);  Ariz.  (§  3467);  III 
(§  163) ;  Kan.  (§  171)  ;  Md.  (§  183)  ;  Mich.  "(§  166)  ;  Neb.  (§  163)  ;  N.  Y. 
(§  283)  ;  Ohio  (§  3177  a)  ;  R.  I.  (§  172)  ;  Wis.  (§  1681-21). 

9  Acceptor  of  honor  of  first  indorser  may  require  the  holder  to  indorse 
the  bill  to  such  acceptor.     Freeman  v.  Perot,  Fed.  Cas.  No.  5,087. 


156  ACCEPTANCE  FOR  HONOR.  §  UU 

]\Iaturity  op  Bill  Payable  After  Sight. 

§  119.  Where  a  bill  payable  after  sight  is  accepted  for  honor,  its 
maturity  is  calculated  from  the  date  of  the  noting  for 
nonpayment. 

"Where  a  bill  payable  after  sight  is  accepted  for  honor,  its  ma- 
turity is  calculated  from  the  date  of  the  noting  for  nonaccept- 
ance,  and  not  from  the  date  of  the  acceptance  for  honor.^" 

10  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or., 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  166) ;  Ariz.  (§  3469) ;  111. 
(§  165);  Kan.  (§  173);  Md.  (§  185);  Mich.  (§  168);  Neb.  (§  165);  N.  Y. 
(§  285);  Ohio  (§  3177  c);  R.  I.  (§  174);  Wis.  (§  1681-23). 


CHAPTER  X. 

INDORSEMENT    AND    TRANSFER. 

§  120.     "Negotiability"  and  "Assignability"  Distinguished. 
§  121.     Effect  of  Distinction  on  Rights  of  Parties. 

1.  Notice  to  Debtor. 

2.  Equities  and  Defenses  Available. 

3.  Suit  in  Name  of  Transferee. 

4.  Presumption  of  Consideration. 
§  122.     What  Constitutes  Nego'tiation. 

1.  Bearer  Paper. 

2.  Order  Paper. 

§  123.     Transfer,  Without  Indorsement,  of  Order  Paper. 

§   124.     Negotiation  by  Delivery. 

§  125.     Negotiation  by  Indorsement — Requisites. 

1.  Where  Written. 

2.  Consideration. 

3.  Delivery. 

4.  Must  Be  of  Entire  Instrument. 
§  126.     Wording  of  Indorsement. 

§  127.  Name  or  Designation  of  Payee  or  Indorsee  Erroneous. 

§  128.  Kinds  of  Indorsement. 

§  129.  Special  Indorsements. 

Instruments  Payable  to  Bearer  Specially  Indorsed. 

§  130.  Blank  Indorsement  Made  Special. 

§  131.  Blank  Indorsement. 

§  132.  Restrictive  Indorsements. 

§  133.  Rights  of  Restrictive  Indorsee. 

§  134.  Rights  of  Subsequent  Indorsees. 

§  135.  Qualified   Indorsements. 

§  136.  Conditional  Indorsements. 

§  137.  Indorsements — By  Whom  Made. 

§  138.  Corporation  or  Infant. 

§  139.  Joint  Payees. 

§  140.  By  Agent. 

§  141.  Indorsement  in  Representative  Capacity. 

§  142.  By  Fiscal  Officer. 

§  143.  Date  of  Indorsement. 

157 


158  INDORSEMENT  AND  TRANSFER.  §  120 

§  144.  Presumption. 

§   145.  Place  of  In-dorsemeiot. 

§  146.  Negotiation  of  Bills  Drawn  in  Sets. 

§   147.  Striking  Out  Indorsements. 

§  148.  Termination  of  Negotiability. 

§  149.  Reissuance  and  Renegotiation. 


Distinction   Between   "Negotiability"   and    "Assignability." 

§  120.  Generally  speaking,  all  contracts  are  assignable ;  only  those 
are  negotiable,  hov/ever,  which  conform  to  the  require- 
ments of  this  act. 

The  first  great  difference  between  these  terms  is  one  of  scope, 
the  term  "assignability"  being  much  the  broader  term.  Gen- 
erally speaking,  any  contract,  whether  executory  ^  or  executed,^ 
is  assignable,  if  it  is  not  of  a  purely  personal  nature,^  and  is  not 
based  on  personal  trust  and  confidence ;  *  but  the  only  contracts 
that  are  negotiable  are  those  complying  with  the  requirements 
of  the  negotiable  instruments  act.^ 

§  121.  The  distinction  between  "negotiability"  and  "assign- 
ability" is  largely  important  as  it  affects  the  rights 
of  the  parties  in  the  following  particulars: 

1.  Necessity  of  notice  to  debtor; 

2.  Equities  and  defenses  available  between  the  parties 

iLa  Rue  v.  Groezinger,  84  Cal.  281,  24  Pac.  42,  18  Am.  St.  Rep.  179 
Macomber  v.  Parker,  31  Mass.  (14  Pick.)  497;  Rochester  Lantern  Co.  v 
Stiles  &  Parker  Press  Co.,  135  N.  Y.  209,  31  N.  E.  1018. 

2  Byar's  Garnishees  v.  Grififin,  31  Miss.  603;  Smith  v.  Hubbard,  85  Tenn 
306,  2  S.  W.  569. 

3  Wheeler  v.  Whann  Co.,  64  Fed.  664;  Fitch  v.  Brockmon,  3  Cal.  348; 
Edison  v.  Babka,  111  Mich.  235,  69  N.  W.  499;  Nixon  v.  Zuricalday,  2 
Misc.  541,  24  N.  Y.  Supp.  121. 

4  Arkansas  Valley  Smelting  Co.  v.  Belden  Min.  Co.,  127  U.  S.  379,  32 
Law.  Ed.  246.  But  see  Rice  v.  Gibbs,  33  Neb.  460,  50  N.  W.  436;  Jenkins 
V.  Columbia  Land  &  Imp.  Co.,  13  Wash.  502,  43  Pac.  328. 

6  See  ante,  chapter  IV,  Essentials  of  Negotiability. 


§121  RIGHTS  OF  PARTIES.  150 

3.  The  right  of  the  transferee  to  sue  on  the  instrument 
in  his  own  name ; 

4.  Presumption  of  consideration. 

Notice  to  debtor. 

Another  distinguishing  feature  is  found  in  the  fact  that  a  com- 
plete binding  transfer  of  a  negotiable  instrument  may  take  place 
without  notice  to  the  debtor;  while  a  transfer  of  a  non-negotiable 
chose  in  action  is  ineffectual  as  against  the  debtor  without  notice 
to  him.^ 

Equities  and  defenses  available. 

Furthermore,  an  assignee  of  a  non-negotiable  chose  in  action 
acquires  only  the  title  and  rights  of  his  assignor,^  and  takes  at 
least  subject  to  all  equities  and  defenses  available  between  the 
original  parties,  and  in  many  jurisdictions  to  all  equities  and  de- 
fenses ;  ®  while  a  bona  fide  transferee  of  a  negotiable  instrument 
may  acquire  a  better  title  than  that  of  his  transferror,^  and  takes 

6  Adams  v.  Leavens,  20  Conn.  1Z\  Merchants'  &  Mechanics'  Bank  v. 
Hewitt,  3  Iowa,  93,  66  Am.  Dec.  49;  Robinson  v.  Marshall,  11  Md.  251; 
Nichols  V.  Hooper,  61  Vt.  295,  17  Atl.  134.  The  weight  of  authority', 
however,  seems  to  be  to  the  contrary.  See  Jones  v.  Lowery  Banking  Co. 
104  Ala.  252,  16  So.  11;  Thayer  v.  Daniels,  113  Mass.  129;  Allyn  v.  Allyn, 
154  Mass.  570,  28  N.  E.  779;  Lewis  v.  Bush,  30  Minn.  244,  15  N.  W.  113^ 
Board  of  Education  v.  Duparquet,  50  N.  J.  Eq.  234,  24  Atl.  922;  Richard- 
son V.  Ainsworth,  20  How.  Prac.  521;  Callanan  v.  Edwards,  32  N.  Y.  483. 

7  Beecher  v.  Buckingham,  18  Conn.  110,  44  Am.  Dec.  580;  Jack  v.  Davis 
29  Ga.  219;  Shufeldt  v.  Gillilan,  124  111.  460,  16  N.  E.  879;  Wagner  v! 
Winter,  122  Ind.  57,  23  N.  E.  754;  Davis  v.  Bechstein,  69  N.  Y.  440,  25 
Am.  Rep.  218;  Mulligan  v.  Smith,  13  Colo.  App.  231,  57  Pac.  731;  Se'lig- 
man  v.  Ten  Eyck's  Estate,  49  Mich.  104,  13  N.  W.  111. 

8  Commercial  Nat.  Bank  v.  Burch,  141  111.  519,  31  N.  E.  420,  IZ  Am.  St. 
Rep.  331;  Stewart  v.  Wilson,  35  Ky.  (5  Dana)  50;  Hampson  v.  Owens, 
55  Md.  583;  Ayres  v.  Campbell,_  9  Iowa,  213,  74  Am.  Dec.  346;  Blyden- 
burgh  V.  Thayer,  1  Abb.  Dec.  (N.  Y.)  156,  34  How.  Prac.  88. 

e  United  States  v.  Read,  2  Cranch,  C.  C.  159,  Fed.  Cas.  No.  16,125;  Sin- 
clair V.  Piercy,  28  Ky.  (5  J.  J.  Marsh)  63;  Wheeler  v.  Guild,  37  Mass. 
(20  Pick.)  545,  32  Am.  Dec.  231;  Commercial  Nat.  Bank  v.  Burch,  141 
111    519,  31  N.  E.  420,  33  Am.  St.  Rep.  331. 


160  INDORSEMENT  AND  TRANSFER.  §  121 

free  from  all  prior  equities  and  defenses/"  except  such  defenses  as 
forgery  ^^  and  want  of  capacity  in  the  maker  or  drawer/^  which 
go  to  the  very  essence  of  the  contract.  The  rights  of  bona  fide 
holders  are  considered  later  in  a  subsequent  chapter. 

Suit  in  name  of  transferee. 

Closely  related  to  the  last-named  distinction  is  another  which 
existed  when  an  assignee  of  a  non-negotiable  chose  in  action  could 
not  sue  at  law  in  his  own  name,  but  could  sue  only  in  the  name 
of  his  assignor.^2  This  rule  has  long  since  been  abolished,  and 
now  an  assignee  of  a  non-negotiable,  as  well  as  the  transferee  of 
a  negotiable,  instrument,  may  sue  at  law  or  in  equity  in  his  own 
name.^*  The  negotiable  instruments  laws  give  this  right  to  the 
■'holder,"  1-5  who  is  defined  to  be  ''the  payee  or  indorsee  of  a  bill 
or  note,  who  is  in  possession  of  it,  or  the  bearer  thereof."  ^^   As 

10  See  post,  §  167. 

11  Mersman  v.  Werges,  3  Fed.  378;  Camp  v.  Carpenter,  52  Mich.  375,  18 
.\.  W.  113;  Butler  v.  Cams,  37  Wis.  61. 

See,  also,  post,  §  167. 

12  See  post,  §  167. 

13  Pollard  V.  Somerset  Mut.  Fire  Ins.  Co.,  42  Me.  221;  Leighton  v.  Pres- 
ton, 9  Gill.  (Md.)  201;  Amherst  Academy  v.  Cowls,  23  Mass.  (6  Pick.) 
i27,  17  Am.  Dec.  387. 

14  Fuller  V.  Arnold,  98  Cal.  522;  Young  v.  Kelly,  3  App.  D.  C.  296;  City 
of  Carlyle  v.  Carlyle  W.,  L.  &  P.  Co.,  140  111.  445,  29  N.  E.  556.  At  the 
;ommon  law  a  chose  in  action  could  not  be  transferred  or  assigned  so 
that  the  transferee  or  assignee  could  maintain  an  action  thereon  in  his 
own  name.  By  the  law  merchant  or  the  custom  of  merchants,  however, 
bills  of  exchange  could  be  transferred  or  assigned,  and  the  assignee  could 
sue  the  drawer  or  acceptor  in  his  own  name.  Oakdale  Mfg.  Co.  v. 
Clarke  [R.  I.]  69  Atl.  681. 

15  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or., 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.   (§  51);  Ariz.   (§  3354);  111. 

§  51);  Kan.  (§  58);  Md.  (§  70);  Mich.  (§  53);  Neb.  (§  51);  N.  Y.  (§  90); 

Dhio  (§  3172  w);  R.  L  (§  59);  Wis.  (§  1676-21. 

Smith  V.  Bayer,  46  Or.  143,  79  Pac.  497,  114  Am.  St.  Rep.  858.  Under 
"he  negotiable  instruments  laws,  the  right  to  sue  includes  the  right  to 
interpose  a  set-off  or  counterclaim. 

16  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
.nLiss.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.   M.,  N.   C,  N.   D.,  Okl.,  Or., 


§  123  WHAT   CONSTITUTES   NEGOTIATION.  161 

was  said  in  a  well  considered  case  on  this  point:  "Any  one  in 
possession  of  a  note  indorsed  in  blank  is  prima  facie  the  holder, 
and  may  sue  upon  it,  until  his  right  is  disproved.  It  is  no  de- 
fense to  an  action  on  such  paper  that  the  property  in  it  is  in  an- 
other, and  not  in  plaintiff.  All  that  is  required  of  the  plaintiff, 
in  the  first  instance,  is  to  present  the  note;  its  possession  being 
prima  facie  evidence  of  his  ownership  of  the  note  and  his  right 
to  sue.  It  is  only  after  the  defendant  has  adduced  evidence  that 
the  note  was  obtained  by  undue  means,  such  as  fraud,  duress, 
theft,  or  the  like,  that  the  plaintiff  is  called  upon  to  offer  other 
facts  in  support  of  his  title."  ^^ 

Presumption  of  consideration. 

The  last  important  distinction  between  the  terms  "negotiabil- 
ity" and  "assignability"  is  that  a  consideration  for  a  negotiable 
instrument  is  presumed;  while  the  consideration  of  a  non-nego- 
tiable instrument  must  be  proved.^^ 

What  Constitutes  Negotiation. 

§  122.  An  instrument  is  negotiated  when  it  is  transferred  from 
one  person  to  another  in  such  manner  as  to  constitute 
the  transferee  the  holder  thereof: 

1.  If  payable  to  bearer  it  is  negotiated  by  delivery; 

2.  If  payable  to  order  it  is  negotiated  by  the  indorse- 

ment of  the  holder  completed  by  delivery. 

§  123.  Where  the  holder  of  an  instrument  payable  to  his  order 
transfers  it  for  value  without  indorsing  it,  the  transfer 
vests  in  the  transferee  such  title  as  the  transferror  had 
therein,  and  the  transferee  acquires,  in  addition,  the  right 
to  have  the  indorsement  of  the  transferror. 

Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  191);  Ariz.  (§  3487);  111. 
(§  190);  Kan.  (§  2);  Md.  (§  14);  Mich.  (§  2);  Neb.  (§  189);  N.  Y.  (§  2); 
Ohio  (§  3178);  R.  I.  (§  2);  Wis.  (§  1675). 

17  Mumford  v.  Weaver,  18  R.  I.  801,  31  Atl.  1. 

18  See  ante,  chapter  V,  Consideration. 

Opp. — Sel. — 11 


162  INDORSEMENT  AND  TRANSFER.  §  123 

What  constitutes  negotiation — Indorsement  or  delivery. 

An  instrument  is  said  to  be  negotiated  when  it  is  transferred 
from  one  person  to  another  in  such  a  manner  as  to  constitute  the 
transferee  the  holder  thereof. ^^  "Holder"  means  the  payee  or 
indorsee  of  a  bill  or  note,  who  is  in  possession  of  it,  or  the  bearer 
thereof.^"  Following  this  definition,  and  the  common  law,  though 
instruments  payable  to  bearer  ^i  and  those  payable  to  order  22  are 
each  negotiable,  the  former  are  negotiated  by  delivery.^^  while  the 
latter  are  negotiated  by  indorsement  of  the  holder  completed  by 
delivery.2* 

Transfer,  without  indorsement,  of  instrument  payable  to  order. 

"Where  the  holder  of  an  instrument  payable  to  his  order  trans- 
fers it  for  value  without  indorsing  it,  the  transfer  vests  in  the 
transferee  such  title  as  the  transferror  had  therein,  and  the  trans- 
feree acquires  in  addition  the  right  to  have  the  indorsement  of 

19  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or., 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  30);  Ariz.  (§  3333);  111. 
(§  30);  Kan.  (§  37);  Md.  (§  49);  Mich.  (§  32);  Neb.  (§  30);  N.  Y.  (§  60); 
Ohio  (§  3172  b);  R.  I.  (§  38);  Wis.  <§  1676). 

20  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or., 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  191);  Ariz.  (§  3487);  111. 
(§  190);  Kan.  (§  2);  Md.  (§  14);  Mich.  (§  2);  Neb.  (§  189);  N.  Y.  (§  2); 
Ohio  (§  3178);  R.  I.  (§  2);  Wis.  (§  1675). 

21  See  ante,  §  51. 

22  See  ante,  §  50. 

23  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or., 
Pa..  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  30);  Ariz.  (§  3333);  111. 
(§  30);  Kan.  (§  37);  Md.  (§  49);  Mich.  (§  32);  Neb.  (§  30);  N.  Y.  (§  60); 
Ohio  (§  3172  b);  R.  L  (§  38);  Wis.   (§  1676). 

Voss  V.  Chamberlain,  139  Iowa,  569,  117  N.  W.  269. 

24  Same  sections  of  negotiable  instruments  laws  as  last  above  cited.  A 
check  payable  to  the  order  of  the  payee  and  not  indorsed  by  him  is  not 
negotiable.  Hellerman  v.  Schantz,  112  N.  Y.  Supp.  1094;  Sublette  y. 
Brewington  (Mo.  App.)  122  S.  W.  1150.  Delivery  essential,  see  post, 
§  125;  what  constitutes,  presumption,  etc.,  see  ante,  chapter  III. 


§  124  NEGOTIATION   BY   DELIVERY.  163 

the  transferror.25  A  transferee  under  such  a  transfer  takes  sub- 
ject to  existing  equities.^*^  But  in  order  to  determine  whether  the 
transferee  is  a  holder  in  due  course,  the  negotiation  takes  effect 
as  of  the  time  when  the  indorsement  is  actually  made.^'^  Where 
the  indorsement  was  omitted  by  mistake,  or  there  was  an  agree- 
ment to  indorse,  made  at  the  time  of  the  transfer,  the  indorse- 
ment, when  made,  relates  back  to  the  time  of  the  transfer.^s 

By  Delivery. 

§  124.     "Delivery"  means  transfer  of  possession,  actual  or  con- 
structive, from  one  person  to  another. 

As  has  been  stated,  every  contract  on  a  negotiable  instrument 
is  incomplete  and  irrevocable  until  the  delivery  of  the  instrument 

25  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C.,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or., 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  49);  Ariz.  (§  3352);  111. 
(§  49);  Kan.  (§  56);  Md.  (§  68);  Mich.  (§  51);  Neb.  (§  49);  N.  Y.  (§  79); 
Ohio  (§  3172  v);  R.  I.  (§  57);  Wis.  (§  1676-19). 

Meuer  v.  Phenix  Nat.  Bank,  94  App.  Div.  331,  88  N.  Y.  Supp.  83. 

A  transferee  by  delivery  without  indorsement  takes  only  an  equit.ible 
interest.  Freeman  v.  Perry,  22  Conn.  617;  Pavey  v.  Stauffer,  45  La.  Ann. 
353,  12  So.  512,  19  L.  R.  A.  716;  Jenkins  v.  Wilkinson,  113  N.  C.  532,  18 
S.  E.  696. 

There  is  an  implied  warranty  that  an  instrument  has  not  been  paid  on 
a  sale  thereof  for  its  face  value.  French  v.  Turner,  15  Ind.  59;  Daskam 
V.  Ullman,  74  Wis.  474,  43  N.  W.  321.  See,  also,  Meriden  Nat.  Bank  v. 
Gallaudet,  120  N.  Y.  298,  24  N.  E.  994. 

See,  also,  Whistler  v.  Forster,  14  C.  B.  (N.  S.)  248,  Bigelow  Lead. 
Cas.  Ti. 

26  Meuer  v.  Phenix  Nat.  Bank,  94  App.  Div.  331,  88  N.  Y.  Supp.  83;  Id., 
42  Misc.  341,  86  N.  Y.  Supp.  701;  Terry  v.  Allis,  16  Wis.  504;  Goshen 
Nat.  Bank  v.  Bingham,  118  N.  Y.  349,  23  N.  E.  180,  16  Am.  St.  Rep.  765, 
7  L.  R.  A.  595. 

27  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Alass.,  Mo.,  Mont,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or., 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  49);  Ariz.  (§  3352);  111. 
(§  49);  Kan.  (§  56);  Md.  (§  68);  Mich.  (§  51);  Neb.  (§  49);  N.  Y.  (§  79); 
Ohio  (§  3172  v);  R.  I.  (§  57);  Wis.  (§  1676-19). 

28  Negotiable  Inst.  Laws  Wis.  (§  1676-19). 

This    provision   is    not    found   in    the    negotiable    instruments    laws  as 


164  INDORSEMENT  AND  TRANSFER.  §  124 

for  the  purpose  of  giving  effect  thereto.^^  The  negotiable  instru- 
ments laws  define  "delivery"  to  mean  the  "transfer  of  posses- 
sion, actual  or  constructive,  from  one  person  to  another,"  ^o  This 
definition  must  be  construed  so  as  to  embody  the  rule  just  stated. 
As  between  immediate  parties,  and  as  regards  a  remote  party 
other  than  a  holder  in  due  course,  the  delivery,  in  order  to  be  ef- 
fectual, must  be  made  either  by  or  under  the  authority  of  the 
party  making,  drawing,  accepting  or  indorsing,  as  the  case  may 
be ;  ^^  and  in  such  case  the  delivery  may  be  shown  to  have  been 
conditional,  or  for  a  special  purpose  only,  and  not  for  the  purpose 
of  transferring  the  property  in  the  instrument/''-  But  where  the 
instrument  is  in  the  hands  of  a  holder  in  due  course,  a  valid  de- 
livery thereof  by  all  parties  prior  to  him,  so  as  to  make  them  liable 
to  him,  is  conclusively  presumed.^^  And  where  the  instrument  is 
no  longer  in  the  possession  of  a  party  whose  signature  appears 
thereon,  a  valid  and  intentional  delivery  by  him  is  presumed  until 
the  contrary  is  shown.^* 


ndopted  in  the  other  states,  but  the  rule  stated  would  probably  be  en- 
forced. 

2!^  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or., 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  16);  Ariz.  (§  3319);  111. 
(§  16);  Kan.  (§  23);  Md.  (§  35);  Mich.  (§  18);  Neb.  (§  16);  N.  Y.  (§  35); 
Ohio  (§  3171  o);  R.  I.  (§  24);  Wis.  (§;  1675-16). 

See  ante,  chapter  III,  §  27. 

30  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or., 
Fa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  191);  Ariz.  (§  3487);  111. 
(§  190);  Kan.  (§  2);  Md.  (§  14);  Mich.  (§  2);  Neb.  (§  189);  N.  Y.  (§  2); 
Ohio  (§  3178);  R.  I.  (§  2);  Wis.  (§  1675). 

31  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or., 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  16);  Ariz.  (§  3319);  111. 
(§  16);  Kan.  (§  23);  Md.  (§  35);  Mich.  (§  18);  Neb.  (§  16));  N.  Y.  (§  35); 
Ohio  (§  3171  o);  R.  I.  (§  24);  Wis.  (§  1675-16). 

32  Same  sections  of  negotiable  instruments  laws  last  above  cited. 

33  Same  sections  negotiable  instruments   laws   last  above   cited. 

34  Same  sections  negotiable  instruments  laws  last  above  cited. 


§  127  NEGOTIATION  BY  INDORSEMENT.  165 

By  Indorsement — Requisites, 

§  125.     To  be  effectual  the  indorsement: 

1.  Must  be  written  on  the  instrument  itself  or  upon  a 
paper  attached  thereto; 

2.  Must  be  supported  by  a  consideration,  though  the 
general  rule  presuming  a  consideration  applies; 

3.  Must  be  completed  by  delivery; 

4.  Must  be  of  the  entire  instrument. 

§  126.  The  signature  of  the  indorser,  v/ithout  additional  words, 
is  a  sufficient  indorsement. 

§  127.  Where  the  name  of  the  payee  or  indorsee  is  wi'ongly  des- 
ignated or  misspelled,  he  may  indorse  the  instrument  as 
therein  described,  adding,  if  he  think  fit,  his  proper  sig- 
nature. 

Where  written. 

An  indorsement  must  be  written  on  the  instrument  itself  or 
on  a  paper  attached  thereto.^^  An  indorsement  is  usually  and 
properly  written  on  the  back  of  the  instrument,^*'  but,  if  intended 
as  an  indorsement,  may  be  written  on  any  part  of  the  instru- 
ment.^'^ The  propriety  of  an  indorsement  on  an  attached  paper  or 
"allonge"  is  well  established.^^    Stamping  an  indorsement  on  the 

35  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or., 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  31);  Ariz.  (§  3334);  111. 
(§  31);  Kan.  (§  38);  Md.  (§  50);  Mich.  (§  33);  Neb.  (§  31);  N.  Y.  (§  61); 
Ohio  (§  3172  c);  R.  I.  (§  39);  Wis.  (§  1676-1). 

It  must  be  in  writing.    Third  Nat.  Bank  v.  Clark,  23  Minn.  263. 

36  Marion  &  M.  Gravel  Road  Co.  v.  Kessinger,  66  Ind.  549. 

37  Richards"  V.  Warring,  39  Barb.  (N.  Y.)  42;  Haines  v.  Dubois,  30  N. 
J.  Law,  259;  Arnot's  Adm'r  v.  Symonds,  85  Pa.  St.  99,  27  Am.  Rep.  630; 
Shain  v.  Sullivan,  106  Cal.  208,  39  Pac.  606. 

38Fountain  v.  Bookstaver,  141  111.  461,  31  N.  E.  17;  Folger  v.  Chase, 
35  Mass.  (18  Pick.)  63;  Crosby  v.  Roub,  16  Wis.  616,  84  Am.  Dec.  720. 


166  INDORSEMENT  AND  TRANSFER.  §  127 

back  of  the  instrnment  with  a  rubber  stamp  is  sufficient  if  made 
by  one  having  authority  and  with  intent  to  indorse,^^  but  such  in- 
dorsement does  not  prove  itself.*" 

Consideration. 

The  rule  that  a  consideration  for  a  negotiable  instrument  is  pre- 
sumed ^^  extends  to  a  transfer  of  the  instrument,  and  a  consid- 
eration for  an  indorsement  is  presumed.*^  A  consideration  for  an 
assignment  of  a  negotiable  instrument  is  also  presumed,*^  Since 
an  antecedent  or  pre-existing  debt  constitutes  value  within  the 
meaning  of  the  negotiable  instrument  laws/^  such  a  debt  is  a  suf- 
ficient consideration  for  an  indorsement  or  an  assignment  of  a 
negotiable  instrument.*^ 

Delivery. 

Under  the  rules  of  the  common  law  and  the  negotiable  instru- 

It  is  not  necessary  that  it  be  physically  impossible  to  place  the  in- 
dorsement on  the  instrument  itself  in  order  to  sustain  one  placed  on  an 
allonge.     Crosby  v.  Roub,  16  Wis.  616,  84  Am.  Dec.  720. 

The  indorsement  cannot  be  made  on  a  separate  unattached  paper. 
Traders'  Deposit  Bank  v.  Chiles,  14  Ky.  Law  Rep.  617.  A  mortgage  not 
attached  to  the  note  is  not  an  allonge.     Doll  v.  Hollenbeck,  19  Neb.  639, 

28  N.  W.  286.  But  see  Crosby  v.  Roub,  16  Wis.  616,  84  Am.  Dec.  720, 
where  it  was  held  that  a  recital  in  a  railroad  mortgage  bond  that  the 
railroad  company  transferred  the  note  and  mortgage  to  a  certain  person 
was  a  sufficient  indorsement  of  the  note  to  such  person. 

S9Mayers  v.  McRinnmon,  140  N.  C.  640,  53  S.  E.  447,  111  Am.  St.  Rep. 
879. 

40  Mayers  v.  McRinnmon,  140  N.  C.  640,  S3  S.  E.  447,  111  Am.  St.  Rep. 
879. 

41  See  ante,  §  59. 

42  Gwyn  V.  Lee,  1  Md.  Ch.  445;  Connerly  v.  Planters'  &  Merchants'  Ins. 
Co.,  66  Ala.  432;  Pratt  v.  Adams,  7  Paige   (N.  Y.)   615;   Owens  v.  Snell, 

29  Or.  483,  44  Pac.  827.  See,  further,  on  question  of  consideration  for 
indorsement,  Bucklen  v.  Johnson,  19  Ind.  App.  406,  49  N.  E.  612;  Fred- 
erick V.  Winans,  51  Wis.  472,  8  N.  W.  301. 

43  Grimes  v.  McAninch,  9  Ind.  278. 
44See  ante,  §  61. 

45  See  Rogers  v.  Gallagher,  49  111.  182,  95  Am.  Dec.  583. 
Consideration  as  affecting  bona  fide  holders,  see  post,  §  167. 


§127  NEGOTIATION  BY  INDORSEMENT.  167 

ments  acts,  a  delivery  is  essential  to  complete  a  transfer  by  de- 
livery.*^ 

Must  be  of  entire  instrument. 

An  indorsement  must  be  of  the  entire  instrument;  and  one 
which  purports  to  transfer  a  part  only  of  the  amount  payable,  or 
to  transfer  the  instrument  to  two  or  more  indorsees  severally, 
does  not  operate  as  a  negotiation  of  the  instrument.*'^  The  same 
rule  applies  to  an  attempted  assignment  of  part,*^  but  an  instru- 

46  A  delivery  is  necessary  to  complete  a  transfer  by  indorsement. 
Spencer  v.  Carstarphen.  IS  Colo.  445;  Middleton  v.  Griffith,  57  N.  J.  Law, 
442,  31  Atl.  405,  51  Am.  St.  Rep.  617;  Howe  v.  Ould,  28  Grat.  (Va.)  1; 
Clark  V.  Sigourney,  17  Conn.  511,  where  the  payee  died  after  having 
placed  his  name  on  the  back  of  the  note,  but  before  delivery  to  the  in- 
tended transferee,  and  it  was  held  that  there  was  no  indorsement. 

Under  the  definition  of  "indorsement,"  as  given  in  the  negotiable  in- 
struments laws,  a  delivery  is  essential  to  a  complete  indorsement.  Neg. 
Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La.,  Mass.,  Mo., 
Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl,  Or.,  Pa.,  Tenn., 
Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§§  191,  16  30);  Ariz.  (§§  3487,  3319, 
3338;;  111.  (§§  190,  16,  30);  Kan.  (§§  2,  23,  37);  Md.  (§§  14,  35,  49);  Mich. 
(§§  189,  18,  32);  Neb.  (§§  2,  16,  30,);  N.  Y.  (§§  2,  35,  60);  Ohio  (§§  3178, 
3171  o,  3172  b);  R.  I.  (§§  2,  24,  38);  Wis.  (§§  1675,  1675-16,  1676). 

47  Neg.   Inst.    Laws    Colo.,    Conn.,   D.   C,    Fla.,    Idaho,    Iowa,    Ky.,    La., 

Mass.,   Mo.,   Mont.,  Nev.,  N.   H.,   N.  J.,  N.   M.,   N.   C,   N.   D.,   Okl.,   Or., 

Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.   (§  32);  Ariz.    (§  3335);  111. 

(§  32);  Kan.  (§  39);  Md.  (§  51);  Mich.  (§  34);  Neb.  (§  32);  N.  Y.  (§  62); 

Ohio  (§  3172  d);  R.  I.  (§  40);  Wis.  (§  1676-2). 

That  an  indorsement  of  part  does  not  pass  title,  see  Frank  v.  Kaigler, 

36  Tex.  305;  Bibb  v.  Skinner,  5  Ky.   (2  Bibb)   57;   Hughes  v.   Kiddell,  2 

Bay  (S.  C.)  324. 

Heretofore,  an  indorsement  to  two  persons  transferred  a  half  interest 

to   each.     Herring  v.  Woodhull,  29   111.  92;    Flint  v.    Flint,   88  Mass.    (6 

Allen)  34,  83  Am.  Dec.  615. 

4S  Martin  v.  Hayes,  1  Busb.  (N.  C.)  423;  Lindsay  v.  Price,  33  Tex.  280; 

Douglass  V.  Wilkeson,  6  Wend.  (N.  Y.)  637.     But  see  Cole  v.  Tuck,  108 

Ala.  227,   19  So.   377,  where  it  was  held  that  a  payee  who  indorses  for 

a  limited  amount  cannot  be  held  liable  for  attorneys'  fees  in  addition  to 

such  amount. 


168  INDORSEMENT  AND  TRANSFER.  §  127 

ment  which  has  been  paid  in  part  may  be  indorsed  as  to  the 
residue>9 

Wording  of  indorsement. 

The  signature  of  the  indorser  without  other  words  is  a  suf- 
ficient indorsement,^''  as  is  such  siguature  coupled  with  a  written 
guaranty  of  payment  and  a  waiver  of  demand  and  notice,  or  an 
indorsement  in  the  following  language :  ^^  "For  value  received 
I  hereby  sell,  transfer  and  assign  the  within  note  and  the  coupons 
thereto  attached  without  recourse.'^  ^^  Where  the  name  of  the 
payee  or  indorsee  is  wrongly  designated  or  misspelled,  he  may 
indorse  the  instrument  as  therein  described,  adding,  if  he  think 
fit,  his  proper  signature.^^ 

49  Same  sections  of  negotiable  instruments  laws  as  last  above  cited. 

See  Barnett  v.  Spencer,  4  Blackf.  (Ind.)  206;  Bledsoe  v.  Fisher,  5  Ky. 
(2  Bibb)  471. 

soNeg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or., 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  31);  Ariz.  (§  3334);  111. 
(§  31);  Kan.  (§  38);  Md.  (§  50);  Mich.  (§  33);  Neb.  (§  31);  N.  Y.  (§  61); 
Ohio  (§  3172  c);  R.  I.   (§  39);  Wis.  (§   1676-1). 

This  signature  may  be  in  pencil.  Brown  v.  Butchers'  &  Drovers'  Bank, 
6  Hill  (N.  Y.)  443,  41  Am.  Dec.  755;  Closson  v.  Stearns,  4  Vt.  11,  23  Am. 
Dec.  245;  Cooper  v.  Bailey,  52  Me.  230. 

The  characters  "1,  2,  8"  in  pencil  form  a  sufficient  indorsement. 
Brown  v.  Butchers'  &  Drovers'  Bank,  6  Hill  (N.  Y.)  443,  41  Am.  Dec.  755. 
See,  also.  Finch  v.  De  Forest,  16  Conn.  445. 

51  Buck  v.  Davenport.  Sav.  Bank,  29  Neb.  407,  45  N.  W.  776,  26  Am. 
St.  Rep.  392;  Phelps  v.  Church,  65  Mich.  231,  32  N.  W.  30. 

52  Thorp  V.  Mindeman,  123  Wis.  149,  101  N.  W.  417,  107  Am.  St.  Rep. 
1003. 

53  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or., 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  43);  Ariz.  (§  3346);  111. 
(§  43);  Kan.  (§  50);  Md.  (§  62);  Mich.  (§  45);  Neb.  (§  43);  N.  Y.  (§  62); 
Ohio  (§  3172  o);  R,  I.  (§  51);  Wis.  (§  1676-14). 


§130  SPECIAL   INDORSEMENTS.  169 

Kinds  and  Effect  Of  Indorsements. 

§  128.  An  indorsement  may  be  either  special,  or  in  blank,  and  it 
may  also  be  either  restrictive  or  qualified,  or  condi- 
tional. 

Special. 

§  129.  A  special  indorsement  specifies  the  person  to  whom,  or 
to  whose  order,  the  instrument  is  to  be  payable,  and  the 
indorsement  of  such  indorsee  is  necessary  to  the  further 
negotiation  of  the  instrument. 

Exception. — Where  an  instrument  payable  to  bearer 
is  indorsed  specially,  it  may  nevertheless  be  further 
negotiated  by  delivery. 

§  130.  The  holder  may  convert  a  blank  indorsement  into  a  special 
indorsement  by  writing  over  the  signature  of  the  in- 
dorser  in  blank  any  contract  consistent  with  the  char- 
acter of  the  indorsement. 

An  indorsement  may  be  special ;  ^*  that  is,  it  may  specify  the 
person  to  whom  or  to  whose  order  the  instrument  is  to  be  pay- 
able.^ A  special  indorsement,  as  thus  defined,  is  the  same  as 
what  is  commonly  called  an  indorsement  in  fuU.^^     The  indorse- 

51  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or., 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  33);  Ariz.  (§  3336);  III. 
(§  33);  Kan.  (§  40);  Md.  (§  52);  Mich.  (§  35);  Neb.  (§  33);  N.  Y.  (§  63); 
Ohio  (§  3172  e);  R.  I.  (§  41);  Wis.  (§  1676-3). 

55  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or., 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  34);  Ariz.  (§  3337);  111. 
(§  34);  Kan.  (§-41);  Md.  (§  53);  Mich.  (§  36);  Neb.  (§  34);  N.  Y.  (§  64); 
Ohio  (§  3172  b);  R.  I.  (§  42);  Wis.  (§  1676-4). 

As  to  what  is  a  special  indorsement,  see  Rice  v.  Stearns,  3  Mass. 
225,  3  Am.  Dec.  129;  Reamer  v.  Bell,  79  Pa.  St.  292. 

66Kilpatrick  v.  Heaton,  3  Brev.  (S.  C.)  92. 


170  INDORSEMENT  AND  TRANSFER.  §130 

inent  of  the  person  to  whom  the  instrument  is  specially  indorsed 
is  necessary  to  the  further  negotiation  of  the  paper." 

Instruments  payable  to  bearer,  specially  indorsed,  pass  by  de- 
livery. 

Where  an  instrument  payable  to  bearer  is  specially  indorsed, 
it  may  nevertheless  be  negotiated  by  delivery.^s  By  expressly 
limiting  the  rule  to  instruments  payable  to  bearer,  the  negotiable 
instruments  act  changes  the  rule  existing  in  some  jurisdictions, 
that  where  the  first  indorsement  is  in  blank,  the  instrument  is 
transferable  by  delivery,  though  there  is  a  subsequent  special  or 
full  indorsement.^^  The  person  so  specially  indorsing  is  liable  as 
indorser  to  such  holders  only  as  make  title  through  his  indorse- 
ment.^*^ 

Blank  indorsement  made  special. 

Under  the  negotiable  instruments  laws  the  holder  may  convert 

57  Same  sections  of  negotiable  instruments  laws  as  last  above  cited. 
Grimes  v.  Piersol,  25  Ind.  246. 

58  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La.. 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or., 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  40);  Ariz.  (§  3343);  111. 
(§  40);  Kan.  (§  47);  Md.  (§  59);  Mich.  (§  42);  Neb.  (§  40);  N.  Y.  (§  70); 
Ohio  (§  31721);  R.  I.  (§  48);  Wis.  (§  1676-10). 

Such  is  the  rule  of  the  law  merchant.  Habersham  v.  Lehman,  63  Ga. 
380;  Johnson  v.  Mitchell,  50  Tex.  ?12,  32  Am.  Rep.  602;  Watervliet  Bank 
V.  White,  1  Denio  (N.  Y.)  608;  Mitchell  v.  Fuller,  15  Pa.  St.  268,  53  Am. 
Dec.  594. 

A  check  payable  to  a  certain  named  person  or  bearer  need  not  be 
indorsed.  Farmers'  &  Merchants'  Bank  v.  Bank  of  Rutherford,  115 
Tenn.  64,  88  S.  W.  939,  112  Am.  St.  Rep.  817. 

50  Mitchell  V.  Fuller,  15  Pa.  St.  268,  53  Am.  Dec.  594;  Watervliet  Bank 
V.  White,  1  Denio  (N.  Y.)  608;  Habersham  v.  Lehman,  63  Ga.  380. 

See  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl,  Or., 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  9);  Ariz.  (§  3312);  111. 
(§  9);  Kan.  (§  1.6);  Md.  (§  28);  Alich.  (§  11);  Neb.  (§  9);  N.  Y.  (§  28); 
Ohio  (§  3171b);  R.  I.  (§  17);  Wis.  (§  1675-9). 

60  Same  sections  of  negotiable  instruments  laws  as  last  above  cited. 


§131  INDORSEMENTS    IN    BLANK.  171 

a  blank  indorsement  into  a  special  or  full  indorsement  by  writing 
over  the  signature  of  the  indorser  any  contract  consistent  with 
the  character  of  the  indorsement.^^  This  rule  authorizes  the  hold- 
er to  fill  up  a  blank  indorsement  with  a  special  indorsement  to 
himself,^2  and  is  applicable  to  an  indorsement  in  blank  without 
recourse.^^  It  does  not,  however,  authorize  the  holder  to  insert 
over  the  signature  of  the  indorser,  without  his  knowledge  or  con- 
sent, a  special  contract  of  guaranty .^^  Nor  does  it  authorize  the 
holder  to  write  in  a  consideration  for  the  indorsement,^  or  a 
waiver  of  demand  and  notice,^^  or  anything  that  will  change  the 
relation  of  the  parties,^^  or  the  nature  of  the  indorsement.^ 

In  Blank. 

§  131.  An  indorsement  in  blank  specifies  no  indorsee,  and  an  in- 
strument so  indorsed  is  payable  to  bearer,  and  may  be 
negotiated  by  delivery. 

61  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or., 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  35);  Ariz.  (§  3338);  111' 
(§  35);  Kan.  (§  42);  Md.  (§  54);  Mich.  (§  Z7);  Neb.  (§  35);  N.  Y.  (§ 
65);  Ohio  (§  3172  g);  R.  I.  (§  43);  Wis.  (§  1676-5). 

As  to  right  of  holder  to  fill  blank  indorsement,  see  Condon  v.  Pearce, 
43  Md.  83. 

62  Lucas  V.  Byrne,  35  Md.  485;  Lyon  v.  Ewings,  17  Wis.  63;  Metcalf 
V.  Yeaton,  51  Me.  198;  Illinois  Conference  v.  Plagge,  177  111.  431,  53 
N.  E.  76,  69  Am.  St.  Rep.  252. 

63  Lyon  V.  Ewings,  17  Wis.  63.  But  see  Catlin  v.  Jones,  1  Pin.  (Wis.) 
130. 

61  Belden  v.  Hann,  61  Iowa,  42,  15  N.  W.  591,  where  the  guarantee 
was  held  to  be  void,  and  the  indorser  still  entitled  to  notice  of  dishonor 
and  protest. 

65  Hood  V.  Robbins,  98  Ala.  484,  13  So.  574. 

66Catlin  V.  Jones,  1  Pin.  (Wis.)  130;  Kimbro  v.  Lamb,  23  Tenn.  (4 
Humph.)  95,  40  Am.  Dec.  628. 

67  Comparree  v.  Brockway,  30  Tenn.  (11  Humph.)  355;  Morrison  v. 
Smith,  13  Mo.  234,  S3  Am.  Dec.  145. 

68  Christian  County  Bank  v.  Goode,  44  Mo.  App.  129. 


172  INDORSEMENT  AND  TRANSFER.  §  132 

Blank  indorsement — Title  passes  by  delivery. 

An  indorsement  may  be  in  blank ;  ^^  that  is,  it  need  not  specify 
an  indorsee."^  Instruments  so  indorsed  are  payable  to  bearer  and 
pass  by  delivery .'^^  The  legal  effect  of  a  blank  indorsement  can- 
not be  varied  by  evidence  of  parol,  contemporaneous  agreements.^^ 

Restrictive — Form. 

§  132.     An  indorsement  is  restrictive  which  either: 

1.  Prohibits  the  further  negotiation  of  the  instrument; 

But  the  mere  absence  of  words  implying  pov/er  to 
negotiate  does  not  make  an  indorsement  restrictive; 

2.  Constitutes  the  indorsee  the  agent  of  the  indorser ; 

3.  Vests  the  title  in  the  indorsee  in  trust  for  or  to  the 
use  of  some  other  person. 

Restrictive  indorsement — Preventing  further  negotiation. 

An  indorsement  may  also  be  restrictive.'^^    It  is  restrictive  if  it 

69  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or., 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  33);  Ariz.  (§  3336);  III. 
(§  33);  Kan.  (§  40);  Md.  (§  52);  Mich.  (§  35);  Neb.  (§  33);  N.  Y.  (§  63); 
Ohio  (§  3172  e);  R.  I.   (§41);  Wis.   (§  1676-3). 

70  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl,  Or., 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  34);  Ariz.  (§  3337);  111. 
(§  34);  Kan.  (§  41);  Md.  (§  53);  Mich.  (§  36);  Neb.  (§  34);  N.  Y.  (§  64); 
Ohio  (§  3172  b);  R.  I.  (§  42);  Wis.   (§  1676-4). 

Voss  V.  Chamberlain,  139  Iowa,  569,  117  N.  W.  269. 

''I  Same  sections  of  negotiable  instruments  laws  as  last  above  cited. 

Voss  V.  Chamberlain,  139  Iowa,  569,  117  N.  W.  269. 

72Torbert  v.  Montague,  38  Colo.  325,  87  Pac.  1145.  Parol  evidence 
is  not  admissible  to  show  that  one  who  indorsed  in  blank  was  not  to 
be  Habit  as  indorser.     Charles  v.  Denis,  42  Wis.  56,  24  Am.  Rep.  383. 

73  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl,  Or., 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  33);  Ariz.  (§  3336);  111. 
(§  33);  Kan.  (§  40);  Md.  (§  52);  Mich.  (§  35);  Neb.  (§  33);  N.  Y.  (§  63); 
Ohio  (§  3172  e);  R.  L  (§  41);  Wis.  (§  1676-3). 


§132  RESTRICTIVE    INDORSEMENTS.  173 

prevents  further  negotiation  of  the  instrument.'^*  Thus,  an  in- 
dorsement to  a  named  person  "only"  is  restrictive,''^  and  so  is  one 
to  pay  the  money  for  any  particular  purpose."^  But  the  mere 
absence  of  the  words  "order"  or  "bearer,"  or  other  words  im- 
plying power  to  negotiate,  does  not  make  an  indorsement  restrict- 


ive. 


77 


Same— Creating  agency  or  trust. 

An  indorsement  is  also  restrictive  if  it  makes  the  indorsee  the 
agent  of  the  indorser.'-s  Under  this  rule  fall  indorsements  for  col- 
lection,''^  and  it  should  be  remembered,  in  this  connection,  that 

74  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or., 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  36);  Ariz.  (§  3339);  111. 
(§  36);  Kan.  (§  43);  Md.  (§  55);  Mich.  (§  38);  Neb.  (§  36);  N.  Y.  (§  66); 
Ohio  (§3172  b);  R.  I.  (§  44);  Wis.  (§  1676-6). 

75  Power  V.  Finnic,  4  Call  (Va.)  411. 

76  White  V.  National  Bank,  102  U.  S.  658,  26  Law.  Ed.  250,  where  the 
indorsement  "Pay  to  A.  or  order,  for  account  of  B,"  was  held  to  make 
A.  merely  the  agent  of  B.  for  the  collection  of  the  instrument.  See, 
also,  Hook  V.  Pratt,  78  N.  Y.  371,  34  Am.  Rep.  539. 

Indorsement  for  deposit,  see  Ditch  v.  Western  Nat.  Bank,  79  Md.  192, 
29  Atl.  n,  138,  47  Am.  St.  Rep.  375,  23  L.  R.  A.  164;  Johnson  v.  Donnell, 
90  N.  Y.  1;  Freeman  v.  Exchange  Bank,  87  Ga.  45,  13  S.  E.  160. 

Indorsements  to  "A,  or  order,  for  account  B,"  see  People's  Bank  v. 
Jefiferson  County  Sav.  Bank,  106  Ala.  524,  17  So.  728,  54  Am.  St.  Rep.  5; 
Blaine  v.  Bourne,  11  R.  I.  119,  23  Am.  Rep.  429;  Armour  Bros.  Banking 
Co.  V.  Riley  County  Bank,  30  Kan.   163,  91  Pac.  506. 

77  Same  sections  of  negotiable  instruniients  laws  as  lasft  above  cited. 

78  Subdivision  2  of  same  sections  of  negotiable  instruments  laws  as  last 
above  cited. 

79  Smith  V.  Bayer,  46  Or.  143,  79  Pac.  497;  Ward  v.  Smith,  74  U.  S. 
(7  Wall.)  447,  19  Law.  Ed.  207;  Commercial  Bank  v.  Armstrong,  148 
U.  S.  50,  37  Law.  Ed.  363;  Claflin  v.  Wilson,  51  Iowa,  15,  50  N.  W.  578; 
Merchants'  Nat.  Bank  v.  Hanson,  33  Minn.  40,  21  N.  W.  849,  53  Am. 
Rep.  5;  National  Butchers'  &  Drovers'  Bank  v.  Hubbell,  117  N.  Y.  384, 
22  N.  E.  1031,  15  Am.  St.  Rep.  515,  7  L.  R.  A.  852;  Bowman  v.  First 
Nat.  Bank,  9  Wash.  614,  38  Pac.  211,  43  Am.  St.  Rep.  870;  Mechanics' 
Bank  v.  Valley  Packing  Co.,  70  Mo.  643;  Blakeslee  v.  Hewett,  76  Wis. 
341,  44  N.  W.  1105;  People's  Bank  v.  Jefferson  County  Sav.  Bank,  106 
Ala.  524,  where  the  effect  of  canceling  a  restrictive  indorsement  for  col- 


174  INDORSEMENT  AND  TRANSFER.  §  133 

a  bank  or  other  agent  for  collection,  on  indorsing  the  instrument, 
becomes  liable  in  all  respects  as  a  general  indorser.^°  An  in- 
dorsement is  also  restrictive  if  it  vests  the  title  in  the  indorsee  in 
trust  for,  or  to  the  use  of,  some  other  person.^^ 

Restrictive — Rights  of  Indorsee. 

§  133.    A  restrictive  indorsement  confers  upon  the  indorsee  the 
right : 

1.  To  receive  payment  of  the  instrument; 

2.  To  bring  any  action  thereon  that  the  indorser  could 

bring ; 

3.  To  transfer  his  rights  as  such  indorsee,  where  the 

form  of  the  indorsement  authorizes  him  to  do  so. 

§  134.     But  all  subsequent  indorsees  acquire  only  the  title  of  the 
first  indorsee  under  the  restrictive  indorsement. 

Under  a  restrictive  indorsement  the  indorsee  may  receive  pay- 
ment of  the  instrument,^^  bring  any  action  the  indorser  could 

lection,  and  placing  an  absolute  indorsement  on  the  paper,  is  consid- 
ered. 

An  unrestricted  indorsement,  intended  for  collection,  does  not  render 
the  indorser  liable  to  a  subsequent  holder  under  indorsements  "for  col- 
lection." Freeman's  Nat.  Bank  v.  National  Tube-Works,  151  Mass.  413, 
24  N.  E.  779,  21  Am.  St.  Rep.  461,  8  L.  R.  A.  42. 

Where  indorsement  in  blank  is  accompanied  by  a  letter  stating  that  the 
draft  is  for  "collection  and  credit,"  the  indorsement  and  letter  should 
be  read  together,  and,  so  read,  render  the  indorsement  restrictive.  Bank 
of  America  v.  Waydell,  187  N.  Y.  115,  79  N.  E.  857,  afg.  103  App.  Div. 
25,  92  N.  Y.  Supp.  666. 

80  See  post,  §  161. 

81  Subdivision  3  of  same  sections  of  negotiable  instruments  laws  as  last 
above  cited. 

Hook  v.  Pratt,  78  N.  Y.  371,  34  Am.  Rep.  539,  where  the  indorsement 
was  to  "pay  to  the  order  of  Mrs.  Mary  Hook  *  *  *  for  the  benefit 
of  her  son  Charlie." 

82  Payment  to  indorsee  for  collection  is  good.  King  v.  Fleece,  54 
Tenn.   (7  Heisk.)  273;  Padfield  v.  Green,  85  111.  529. 

Neg.    Inst.    Laws    Colo.,    Conn.,    D.    C,    Fla.,    Idaho,    Iowa,    Ky.,    La., 


§135  QUALIFIED    INDORSEMENTS.  175 

bring,^3  and  transfer  his  rights  as  such  indorsee  where  the  form 
of  the  indorsement  authorizes  him  to  do  so.^*  A  restrictive  in- 
dorsee takes  the  paper  subject  to  all  equities  that  might  have 
been  asserted  by  the  maker  if  it  had  not  been  indorsed,^^  and  all 
subsequent  indorsees  acquire  only  the  title  of  the  first  indorsee 
under  the  restrictive  indorsement.^^ 


Qualified. 

§  135.  A  qualified  indorsement  may  be  made  by  adding  to  the 
indorser's  signature  the  w^ords  "without  recourse,"  or 
any  words  of  similar  import.  Such  an  indorsement  does 
not  impair  the  negotiable  character  of  the  instrument 
and  constitutes  the  indorser  a  mere  assignor  of  the  title 
to  the  instrument. 

Mass.,   Mo.,   Mont.,  Nev.,   N.   H.,   N.  J.,  N.   M.,   N.   C,   N.   D.,   Okl.,  Or., 

Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.   (§  Z7);  Ariz.   (§  3340);  111. 

(§  2,7);  Kan.  (§  44);  Md.  (§  56);  Mich.  (§  59);  Neb.  (§  2,7);  N.  Y.  (§  67); 

Ohio  (§  31721);  R.  I.  (§  45);  Wis.  (§  1676-7). 

83  Subdivision   2   of   same   sections    of   negotiable    instruments   laws    as 

last  above  cited. 

Smith  V.  Bayer,  46  Or.  143,  79  Pac.  497,  114  Am.  St.  Rep.  858. 

An    indorsee  for   collection  may  sue  in  his  own   name.     McCallum  v. 

Driggs,  35  Fla.  277;  Wilson  v.  Tolson,  79  Ga.  137,  3  S.  E.  900;  Moore  v. 
Hall,  48  Mich.  143,  11  N.  W.  844;  Roberts  v.  Parrish,  17  Or.  583,  22  Pac. 
136;  Cross  v.  Brown,  19  R.  I.  220,  33  Atl.  147;  King  v.  Fleece,  54  Tenn. 
(7  Heisk.)  273.  But  see  Black  v.  Enterprise  Ins.  Co.,  33  Ind.  223;  Rock 
County  Nat.  Bank  v.  Hollister,  21  Minn.  385,  where  such  indorsee  was 
held  not  to  be  the  "real  party  in  interest."  In  Minnesota  Thresher  Mfg. 
Co.  V.  Heipler,  49  Minn.  395,  52  N.  W.  33,  it  was  held  that  the  payee 
of  a  draft  was  the  real  party  in  interest,  though  there  was  an  agreement 
between  him  and  the  drawer  that  he  took  it  for  collection.  See,  also, 
Eaton  V.  Alger,  47  N.  Y.  345. 

84  Subdivision  3  of  same  sections  of  negotiable  instruments  laws  as  last 
above  cited. 

See  Brook  v.  Vannest,  58  N.  J.  Law,  162,  22  Atl.  382. 

85  Smith  V.  Bayer,  46  Or.  143,  79  Pac.  497,  114  Am.  St.  Rep.  858.     Pay- 
ment to  indorser  after  assignment  a  defense.     Id. 

86  Same  subdivisions  and  sections  of  negotiable  instruments  laws  as  last 
above  cited. 


176  INDORSEMENT  AND  TRANSFER.  §  135 

An  indorsement  may  be  qualified.^^  An  indorsement  "without 
recourse, "S3  or  in  words  of  similar  import,^^  is  qualified.  A 
qualified  indorsement  makes  the  indorser  a  mere  assignor  of  the 
title  to  the  instrument,^"  but  does  not  impair  its  negotiability.^^ 
In  the  absence  of  special  contract,  the  obligations  of  a  transferror 
of  negotiable  paper  by  an  indorsement  "without  recourse"  are 
"substantially  the  same  as  those  of  a  transferror  of  such  paper 
when  payable  to  bearer  by  delivery  merely.  It  is  a  clear  and  well 
settled  doctrine  that  such  a  transfer  does  not  make  the  party  lia- 
ble as  indorser.  When  he  indorses  'vv'ithout  recourse'  *  *  * 
he  ceases  to  be  a  party  to  the  paper.    He  cannot  be  made  liable 

Leary  v.  Blanchard,  48  Me.  269. 

Rights  under  indorsement  for  collection,  see  Bank  of  Metropolis  v. 
First  Nat.  Bank,  19  Fed.  301;  Central  Railroad  v.  First  Nat.  Bank  of 
Lynchburg,  73  Ga.  383;  Claflin  v.  Wilson,  51  Iowa,  15,  50  N.  W.  578. 

87  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont-.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or., 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  33);  Ariz.  (§  3336);  111. 
(§  33);  Kan.  (§  40);  Md.  (§  52);  Mich.  (§  35);  Neb.  (§  33);  N.  Y.  (§  63); 
Ohio  (§  3172  e);  R.  I.  (§  41);  Wis.  (§  1676-3). 

88  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Old.,  Or., 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  38);  Ariz.  (§  3341);  111. 
(§  38);  Kan.  (§  45);  Md.  (§  57);  Mich.  (§  40);  Neb.  (§  38);  N.  Y.  (§  68); 
Ohio  (§  3172  i);  R.  I.   (§  46);  Wis.   (§  1676-8). 

Doom  V.  Sherwin,  20  Colo.  234,  38  Pac.  56;  Cross  v.  Hollister,  47  Kan. 
652,  28  Pac.  693;  Johnson  v.  Williard,  83  Wis.  420,  53  N.  W.  776,  17  L. 
R.  A.  564;  President  of  Fitchburg  Bank  v.  Greenwood,  84  Mass.  (2  Al- 
len) 434;  Hayden  v.  Strong,  23  Hun  (N.  Y.)  527. 

89  Same  sections  of  negotiable  instruments  laws  as  last  above  cited. 
See  Markey  v.   Corey,   108  Mich.   184,  66  N.  W.  493,  62  Am.   St.  Rep. 

698,  36  L.  R.  A.  117. 

90  Same  sections  of  negotiable  instruments  laws  as  last  above  cited. 
Erotherton  v.  Street,  124  Ind.  599,  24  N.  E.  1068. 

91  Same  sections   of  negotiable  instruments  laws  as  last  above   cited. 

Elgin  City  Banking  Co.  v.  Hall  [Tenn.]  108  S.  W.  1068;  Evans  v.  Free- 
man, 142  N.  C.  61,  54  S.  E.  847.  Indorsement  "for  value  received,  I 
hereby  sell,  transfer,  and  assign  the  within  note  and  the  coupons  thereto 
attached  without  recourse,"  does  not  impair  negotiable  character  of  in- 
strument. Thorp  V.  Mindeman,  123  Wis.  149,  101  N.  W.  417,  107  Am." St. 
Rep.  1003. 


§  136  CONDITIONAL  INDORSEMENTS.  ]77 

as  a  party  to  or  upon  the  instrument."  ^^  He  still  remains  liable, 
hovrever,  on  the  implied  warranties  which  accompany  a  transfer 
of  bearer  paper  by  delivery .^^  As  between  successive  indorsers  it 
may  be  shown  by  parol  to  which  the  words  "without  recourse" 
apply.''* 

Conditional. 

§  136.  Where  an  indorsement  is  conditional,  a  party  required  to 
pay  the  instrument  may  disregard  the  condition  and 
make  payment  to  the  indorsee  or  his  transferee,  whether 
the  condition  has  been  fulfilled  or  not.  But  any  person 
to  whom  an  instrument  so  indorsed  is  negotiated  will 
hold  the  same,  or  the  proceeds  thereof,  subject  to  the 
rights  of  the  person  indorsing  conditionally. 

An  indorsement  may  also  be  conditional.^^  The  person  required 
to  pay  may  disregard  the  condition,  and  pay  to  the  indorsee  or 
his  transferee,  whether  the  condition  has  been  performed  or  not.^ 
But  any  person  to  whom  an  instrument  so  indorsed  is  negotiated 

92  Watson  V.  Chesire,  18  Iowa,  202,  87  Am.  Dec.  382.  See,  also,  Rice 
V.  Stearns,  3  Mass.  225,  3  Am.  Dec.  129;  Otis  v.  Cullum,  92  U.  S.  447, 
23  Law.  Ed.  496;  Hannum  v.  Richardson,  48  Vt.  508,  21  Am.  Rep.  152; 
Drennan  v.  Bunn,  124  III.  175,  16  N.  E.  100,  7  Am.  St.  Rep.  354;  Palmer 
V.  Courtney,  32  Neb.  773,  49  N.  W.  754. 

93  Watson  V.  Chesire,  18  Iowa,  202,  87  Am.  Dec.  382. 

Indorsement  "without  recourse"  does  not  avoid  warranty  of  genuine- 
ness and  title.  Code  Supp.  §  3060-a65.  State  v.  Corning  State  Sav.  Bank, 
139  Iowa,  388,  115  N.  W.  937. 

For  implied  warranties,  where  negotiation  is  by  delivery  or  qualified 
indorsement,  see  post,  §  158. 

94  Corbett  v.  Fetzer,  47  Neb.  269,  66  N.  W.  417. 

95  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C.,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or., 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  33);  Ariz.  (§  3336);  111. 
(§  33);  Kan.  (§  40);  Md  (§  52);  Mich.  (§  35);  Neb.  (§  33);  N.  Y.  (§  63); 
Ohio  (§  3172  e);  R.  I.  (§  41);  Wis.  (§  1676-3). 

96  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or., 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  39);  Ariz.  (§  3342):  It 

Opp. — Bel. — 12 


178  INDORSEMENT  AND  TRANSFER.  §  137 

will  hold  the  same,  or  the  proceeds  thereof,  subject  to  the  rights 
of  the  person  indorsing  conditionally.^^ 


By  Whom  Indorsed. 

In  General. 

§  137.  Generally  the  instrument  must  be  indorsed  by  the  per- 
son to  whom  it  is  payable  or  his  duly  authorized  agent. 

§  138.  The  indorsement  or  assignment  of  the  instrument  by  a 
corporation  or  by  an  infant  passes  the  property  therein, 
notwithstanding  that  from  want  of  capacity  the  cor- 
poration or  infant  may  incur  no  liability  thereon. 

In  order  to  pass  title  to  the  instruument,  the  indorsement  must 
be  made  by  one  legally  interested  in  the  paper ;  that  is,  generally, 
by  the  payee  or  his  duly  authorized  agent.^^  As  a  general  rule 
executors  have  no  power  to  bind  the  estate  by  contracts  of  indorse- 
ment.s9 

While  ordinarily  the  person  transferring  the  paper  must  have 
capacity  to  contract,^°''  still,  by  the  express  provisions  of  the  ne- 
gotiable instruments  laws,  the  indorsement  of  an  infant  or  cor- 
poration passes  the  property  in  the  instrument,   though,   from 

(§  39);  Kan.  (§  46);  Md.  (§  58);  Mich.  (§  41);  Neb.  (§  39);  N.  Y.  (§  69); 
Ohio  (§  3172  k);  R.  I.  (§  47);  Wis.  (§  1676-9). 

This  changes  the  old  rule  as  it  existed  in  England.  See  Robertson 
V.  Kensington,  4  Taunt.  30,  where  the  indorsement  was  to  pay  C,  or 
order,  "upon  my  name  appearing  in  the  Gazette  as  ensign  in  any  regi- 
ment of  the  line  between  the  1st  and  64th,  if  within  two  months  from 
date,"  and  it  was  held  that  a  payment  to  a  subsequent  indorsee  was  made 
at  the  risk  of  the  condition  being  unfulfilled. 

87  Same  sections  of  negotiable  instruments  laws  as  last  above  cited. 

9S  Chitty  on  Bills  (13th  Ed.)   197. 

99  Packard  v.  Dunfee,  119  App.  Div.  599,  104  N.  Y.  Supp.  140. 

100  Nightingale  v.  Withington,  15  Mass.  272,  8  Am.  Dec.  101;  Hardy 
V.  Waters.  38  Me.  450. 


§  139  WHO    MUST   INDORSE.  170 

want  of  capacity  the  infant  or  corporation  could  incur  no  liability 
tliereon.^°i 

Joint  Payees. 


§  139.  Where  an  instrument  is  payable  to  the  order  of  two  or 
more  payees  or  indorsees  who  are  not  partners,  all  must 

,  indorse,  unless  the  one  indorsing  has  authority  to  indorse 

for  the  others. 

Where  an  instrument  is  payable  to  the  order  of  two  or  more 
payees  or  indorsees  who  are  not  partners,  all  must  indorse  unless 
the  one  indorsing  has  authority  to  indorse  for  the  other.^'^^  13^^ 
title  will  pass  where  one  of  two  joint  indorsees  indorses  to  the 
other,i°3  Qj.  where  one  of  two  joint  payees  indorses  to  a  stranger, 
who  in  turn  indorses  to  the  other  payee.^°*  One  partner  may  in- 
dorse for  the  firm,^05  ^nd  all  the  partners  may  indorse  to  one  of 
their  number.^°^ 

101  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or., 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  22);  Ariz.  (§  3325);  III! 
(§  22);  Kan.  (§  29);  Md.  (§  41);  Mich.  (§  24);  Neb.  (§  22);  N.  Y.  (§  41); 
Ohio  (§  3171  v);  R.  I.  (§  30);  Wis.  (§  1675-22). 

102  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or., 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  41);  Ariz.  (§  3344);  111'. 
(§  41);  Kan.  (§  48);  Md.  (§  60);  Mich.  (§  43);  Neb.  (§  41);  N.  Y.  r§  71); 
Ohio  (§  3172  m);  R.  L  (§  49);  Wis.  (§  1676-11). 

Allen  V.  Corn  Exchange  Bank,  87  App.  Div.  335,  84  N.  Y.  Supp.  1001; 
Rhyner  v.  Feickert,  92  111.  305,  34  Am.  Rep.  130;  Foster  v.  Hill,  36  N. 
H.  526.  Under  this  section,  indorsement  of  all  payees  necessary  to  give 
good  title  to  the  transfereee.  First  Nat.  Bank  v.  Gridley,  112  App  Div 
398,  98  N.  Y.  Supp.  445. 

103  Logue  v.  Smith,  Wright  (Ohio)  10. 

104  See  McLeod  v.  Snyder,  110  Mo.  298,  19  S.  W.  494. 

105  Childress  v.  Emory,  21  U.  S.  (8  Wheat.)  642,  5  Law.  Ed.  530. 

106  Merrill  v.  Guthrie,  1  Pin.  (Wis.)  435;  Manegold  v.  Dulau  30  Wis 
S4L 


180  INDORSEAIENT  AND  TRANSFER.  §  14U 

By  Agent. 

§  140.    An  indorsement  may  be  made  by  a  duly  authorized  agent. 

§  141.  Where  any  person  is  under  obligation  to  indorse  in  a 
representative  capacity,  he  may  indorse  in  such  terms 
as  to  negative  personal  liability. 

Indorsement  by  agent  or  in  representative  capacity. 

An  indorsement  may  be  made  by  an  agent/*^''  and  the  authority 
of  the  agent  may  be  in  writing  or  by  paroL^^^  While  this  author- 
ity may  be  implied,  still  it  must  ordinarily  be  expressly  con- 
ferred.^"^ An  authority  to  indorse,  given  by  the  payee  of  an  or- 
der while  competent,  may  be  exercised  by  the  person  to  whom  it 
was  given,  after  the  payee  has  become  incompetent.^^'^  Lawful 
possession  of  a  negotiable  instrument,^^^  or  possession  with  au- 
thority to  collect,^^^  confers  a  right  to  indorse.  An  unauthorized 
indorsement  may  be  ratified,^^^  either  by  a  failure  to  repudiate  the 
indorsement  after  full  knowledge  of  the  facts,^^'*  or  by  receiving 

107  Northampton  Bank  v.  Pepoon,  11  Mass.  288;  Fountain  v.  Book- 
staver,  141  111.  461,  31  N.  E.  17;  Bettis  v.  Bristol,  56  Iowa,  41,  8  N.  W.  808. 
E.inks  au'tihorized  to  deal  in  commercial  paper  are  bound  by  its  indorse- 
ment or  guaranty  by  their  executwe  officers.  State  v.  Corning  State 
Sav.  Bank,  139  Iowa,  338,  115  N.  W.  937. 

108  Fountain  v.  Bookstaver,  141  111.  461,  31  N.  E.  17;  Bettis  v.  Bristol, 
56  Iowa,  41,  8  N.  W.  808;  Cooper  v.  Bailey,  52  Me.  230.  See,  also,  Sec- 
ond Nat.  Bank  v.  Martin,  82  Iowa,  442,  48  N.  W.  735;  First  Nat.  Bank 
V.  Loyhed,  28  Minn.  396,  10  N.  W.  421.  Authority  of  corporate  officer 
to 'indorse  paper  payable  to  the  corporation  may  be  implied  from  pre- 
vious conduct  and  custom.  Black  v.  First  Nat.  Bank,  96  Md.  399,  54  Atl. 
88.  Telegraphed  authority  "to  indorse,"  what  might  be  termed  a  re- 
newal note,  held  to  include  authority  to  waive  demand,  etc.,  the  indorse- 
ment on  the  first  note  containing  such  a  waiver.  State  Bank  &  Trust 
Co.  of  Los  Angeles  v.  Evans,  198  Mass.  11,  84  N.  E.  329. 

109  Bank  of  Morganton  v.  Hay,  143  N.  C.  326,  55  S.  E.  811. 
no  Mills  V.  American  Express  Co.,  98  Mich.  154,  57  N.  W.  97. 

111  Andrews  v.  Bond,  16  Barb.  (N.  Y.)  633. 

112  Willison  V.  Smith,  52  Mo.  App.  133. 

113  Lysle  V.  Beals,  27  La.  Ann.  274. 
Ill  Mayer  v.  Old,  57  Mo.  App.  639. 


§  142  WHO    MUST    INDORSE.  181 

the  proceeds  of  the  instruments;"^  but  a  mere  acquiescence  in  an 
unauthorized  sale  of  a  note  given  to  an  agent  for  collection,  with- 
out knowledge  of  the  wrongful  indorsement,  does  not  amount  to 
a  ratification."^  "Where  an  instrument  is  so  payable  or  indorsed 
tliat  the  payee  or  indorsee  is  under  obligation  to  indorse  in  a  rep- 
resentative capacity,  he  may  indorse  in  such  terms  as  will  nega- 
tive personal  liability,"'' 

By  Fiscal  Officer. 

§  142.  "Where  an  instrument  is  drawn  or  indorsed  to  a  person 
as  "cashier"  or  other  fiscal  officer  of  a  bank  or  corpo- 
ration, it  is  deemed  prima  facie  to  be  payable  to  the  ba,nk 
or  corporation  of  which  he  is  such  officer,  and  may  be 
negotiated  by  either  the  indorsement  of  the  bank  or  cor- 
poration, or  the  indorsement  of  the  officer. 

Where  an  instrument  is  drawn  or  indorsed  to  a  person  as  "cash- 
ier" or  other  fiscal  officer  of  a  bank  or  corporation,  it  is  deemed 
prima  facie  to  be  payable  to  such  bank  or  corporation,  and  may 
be  negotiated  by  either  the  indorsement  of  the  bank  or  corpo- 
ration, or  the  indorsement  of  such  officer,"^  and,  as  against  a  bona 

115  Third  Nat.  Bank  v.  Butler  Colliery  Co.,  59  Hun,  627,  14  N.  Y.  Supp. 
21.     But  see  Claflin  v.  Wilson,  51  Iowa,  15,  50  N.  W.  578. 

iieSherrill  v.  Weisiger  Clothing  Co.,  114  N.  C.  436,  19  S.  E.  365. 

ii7Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or., 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  44);  Ariz.  (§  3347);  111. 
(§  44);  Kan.  (§  51);  Md.  (§  63);  Mich.  (§  46);  Neb.  (§  44);  N.-Y.  (§  74); 
Ohio  (§  3172  p);  R.  I.  (§  52);  Wis.  (§  1676-14). 

Davis  V.  Peck,  54  Barb.  (N.  Y.)  425. 

Descriptio  personae  in  indorsement,  see  Speelman  v.  Culbertson,  15 
Ind.  441;  Powell  v.  Morrison,  35  Mo.  244. 

A  bank  is  bound  by  an  indorsement,  "Pay  to  order  of  A.  J.  A.  Marine 
Bank  by  J.  S.  H.,  Pres't."  Aiken  v.  Marine  Bank,  16  Wis.  713.  And  a 
bank  of  which  A.  B.  is  cashier  is  bound  by  an  indorsement,  "A.  B.,  Cas." 
Houghton  V.  First  Nat.  Bank,  26  Wis.  663,  7  Am.  Rep.  107. 

118  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl,  Or., 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  42);  Ariz.   (§  3345);  111. 


132  INDORSEMENT  AND  TRANSFER.  §  142 

fide  purchaser,  it  would  seem  that  this  presumption  is  conclu- 
sive.1^9  This  rule  enlarges  the  previously  existing  rule  that  paper 
payable  or  indorsed  to  a  cashier  is  payable  to  the  bank,i2o  by  mak- 
ing paper  payable  or  indorsed  to  "other  fiscal  officers"  payable 
to  the  bank,  and  is  undoubtedly  based  on  the  theory  that  the  em- 
ployment of  the  qualifying  word  "cashier,"  or  other  designation 
of  a  fiscal  office,  appended  to  the  name  of  a  payee  or  indorsee  of 
commercial  paper,  creates  an  ambiguity  as  to  the  real  party  in- 
tended, to  explain  which  parol  evidence  is  admissible  to  show 
who  is  the  principal  for  whose  benefit  such  agent  received  or 
accepted  the  promise  to  pay  a  stipulated  sum  of  money.^^i 
Where,  however,  no  official  designation  is  added  to  the  payee  or 
indorsee's  name,  there  being  no  uncertainty  apparent  from  an  in- 
spection of  the  paper,  parol  evidence  is  inadmissible  to  control 
or  vary  the  terms  of  the  writer.122  j^  indorsement  of  the  name 
of  a  corporation,  made  by  a  duly  authorized  officer,  is  the  indorse- 
ment of  the  corporation,  though  the  agency  does  not  appear.i^s 

(§  42)-  Kan.  (§  49);  Md.  (§  61);  Mich.  (§  44);  Neb.  (§  42);  N.  Y.  (§  72); 
Ohio  (§  3172m);  R.  I.  (§  SO);  Wis.  (§  1676-12). 
Griffin  V.  Erskine,  131  Iowa,  444,  109  N.  W.  13. 

119  Held  incompetent  for  bank  to  show  that  cashier  was  acting  for 
own  interest.  Johnson  v.  Buffalo  Center  State  Bank,  134  Iowa,  731,  112 
N.  W.  165.  * 

120  Watervliet  Bank  v.  White,  1  Denio  (N.  Y.)  608;  First  Nat.  Bank 
V.  Hall,  44  N.  Y.  395,  4  Am.  Rep.  698;  Farmers'  &  Mechanics'  Bank  v. 
Day,  13  Vt.  36.  See,  also,  Dupont  v.  Mt.  Pleasant  Ferry  Co.,  9  Rich. 
Law  (S.  C.)  255  (indorsement  to  president  of  corporation);  Sayers  v. 
First  Nat.  Bank,  89  Ind.  230  (indorsement  to  trustee  of  university). 

121  First  Nat.  Bank  v.  McCullough,  50  Or.  508,  93  Pac.  366,  126  Am.  St. 
Rep.  758,  17  L.  R.  A.  (N.  S.)  1105.  Under  this  section,  in  an  action  on 
a  certificate  of  deposit  payable  to  S,  as  cashier  of  a  bank  and  indorsed 
by  him  as  cashier,  it  is  competent  to  show  that  S  was  the  cashier  of 
the  bank  and  was  acting  in  that  capacity  in  transferring  the  certificate. 
Johnson  v.  Bufifalo  Center  State  Bank,  134  Iowa,  731,  112  N.  W.  165. 

i22First  Nat.  Bank  v.  McCullough,  50  Or.  508,  93  Pac.  366,  126  Am. 
St.  Rep.  758,  17  L.  R.  A.  (N.  S.)  1105. 

123  Second  Nat.  Bank  v.  Martin,  82  Iowa,  442,  48  N.  W.  735. 


§  145  TIME  OF  INDORSEMENT.  183 

Time  and  Place  op  Indorsement. 

§  143.  Where  an  indorsement  is  dated,  such  date  is  deemed  prima 
facie  correct. 

§  144.  Except  where  an  indorsement  bears  date,  after  the  ma- 
turity of  an  instrument,  every  negotiation  is  deemed 
prima  facie  to  have  been  effected  before  the  instrument 
wa^  overdue. 

§  145.  Except  where  the  contrary  appears,  every  indorsement  is 
presumed  prima  facie  to  have  been  made  at  the  place 
where  the  instrument  is  dated. 

Time  of  indorsement — Presumptions. 

An  indorsement  being  dated,  such  date  is  deemed,  prima  facie, 
the  true  date  thereof.^^i  rp]jg  indorsement  being  undated,  it  is 
presumed  to  have  been  made  on  the  date  of  execution  and  deliv- 
ery of  the  note.125  Every  indorsement  is  deemed  prima  facie  to 
have  been  affected  before  the  instrument  was  overdue,  except, 
of  course,  where  the  instrument  bears  date  later  than  the  time  of 
maturity  of  the  instrument.^^^ 

124  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or.] 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  11);  Ariz.  (§  3314)-  111' 
(§  11);  Kan.  (§  18);  Md.  (§  30);  Mich.  (§  13);  Neb.  (§  11);  N.  Y.  (§'30)- 
Ohio  (§  3171  j);  R.  I.  (§  19);  Wis.  (§  1675-11). 

125  Rodriguez  v.  Merriman,  133  111.  App.  372;  Grier  v.  Cabbie,  45  111. 
App.  405;  Way  v.  Butterworth,  108  Mass.  509;  Bradford  v.  Prescott, 
85  Me.  482;  Mason  v.  Noonan,  7  Wis.  510. 

In  the  absence  of  evidence  to  the  contrary,  indorsements  are  presumed 
to  have  been  made  at  or  about  the  date  of  the  note.     Rule  applied  to 
note  payable  to  the  order  of  the  maker.     Roach  v.   Sanborn  Land  Co 
135  Wis.  354,  115  N.  W.  1102. 

Variance  between  pleading  and  proof  as  to  time  of  indorsement,  see 
Canfield  v.  Mcllwaine,  32  Md.  94;  Little  v.  Blunt,  33  Mass.  (16  Pick) 
359;  Davis  v.  Miller,  14  Grat.  (Va.)  1. 

126  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,'  Or' 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  45) ;  Ariz.  (§  3348)  •  111' 

(§  45);  Kan.  (§  52);  Md.  (§  64);  Mich.  (§  47);  Neb.  (§  45);  N.  Y    (§' 75)'- 
Ohio  (§  3172  q);  R.  I.  (§  53);  Wis.  (§  1676-15). 


184  INDORSEMENT  AND  TRANSFER.  §  iiij 

Place  of  indorsement — Presumptions. 

Following  the  common-law  riile,i27  every  indorsement  is  pre- 
sumed to  have  been  made  at  the  place  where  the  instrument  is 
dated.128 

Negotiation  of  Bills  Drawn  In  Sets. 

§  146.  V/here  two  or  more  parts  of  a  set  are  negotiated  to  dif- 
ferent holders  in  due  course,  the  holder  whose  title  first 
accrues  is  as  between  such  holders  the  true  owner  of  the 
bill.  But  nothing  herein  affects  the  rights  of  a  person 
who  in  due  course  accepts  or  pays  the  part  first  presented 
to  him. 

Ordinarily  the  indorsement  or  transfer  of  one  part  of  a  bill 
drawn  in  a  set  is  a  transfer  of  the  whole  set,i29  i^^it,  as  between 
holders  in  due  course  of  two  or  more  parts  of  a  set,  the  one  whose 
title  first  accrues  is  the  owner  of  the  bill.^^"  But  this  rule  does 
not  affect  the  rights  of  a  person  who  in  due  course  accepts  or 
pays  the  part  first  presented  to  him.^^i 

127  Chemical  Nat.  Bank  v.  Kellogg,  183  N.  Y.  92,  75  N.  E.  1103,  111  Am. 
St.  Rep.  717,  2  L.  R.  A.  (N.  S.)  299,  afg.  87  App.  Div.  633,  84  N.  Y.  Supp. 
1121. 

128  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or., 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  46);  Ariz.  (§  3349);  111 
(§  46);  Kan.  (§  S3);  Md.  (§  65);  Mich.  (§  48);  Neb.  (§  46);  N.  Y.  (§  76); 
Ohio  (§  3172  r);  R.  I.  (§  54);  Wis.  (§  1676-16). 

Chemical  Nat.  Bank  v.  Kellogg,  183  N.  Y.  92,  75  N.  E.  1103,  111  Am. 
St.  Rep.  717,  2  L.  R.  A.  (N.  S.)  299. 
i29Walsh  V.  Blatchley,  6  Wis.  413,  422,  70  Am.  Dec.  409. 

130  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or., 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  179);  Ariz.  (§  3482);  lU. 
(§  178);  Kan.  (§  186);  Md.  (§  198);  Mich.  (§  181);  Neb.  (§  178);  N.  Y. 
(§  311);  Ohio  (§  3177  p);  R.  I.  (§  187);  Wis.   (§  1681-36). 

131  Same  sections  of  negotiable  instruments  laws  as  last  above  cited. 


§147.  TERMINATION   OF   LIABILITY.  185 

Striking  Out  Indorsements. 

§  147.  The  holder  may  at  any  time  strike  out  any  indorsement 
which  is  not  necessary  to  his  title.  The  indorser  whose 
indorsement  is  struck  out,  and  all  indorsers  subsequent 
to  him,  are  thereby  relieved  from  liability  on  the  indorse- 
ment. 

It  is  a  general  rule  that  an  indorser  may  strike  out  his  own  in- 
dorsement if  the  instrument  is  returned  to  him,i22  qj.  indorsements 
subsequent  to  his  own  if  he  again  becomes  the  holder.^ss  tj^^ 
holder  may  also,  at  any  time,  strike  out  any  indorsement  which 
is  not  necessary  to  his  title,^^!  and  in  this  connection  the  negotiable 
instruments  laws  follow  the  common-law  rule.^^     An    indorser 

13'^  Sweet  V.  Garwood,  88  111.  407;  Chautauqua  County  Bank  v.  Davis, 
21  Wend.  (N.  Y.)  584.    See,  also,  French  v.  Jarvis,  29  Conn.  347. 

issQiddings  v.  McCumber,  51  111.  App.  Z72>;  Alcock  v.  McKain,  12  La. 
Ann.  614;  Ritchie  v.  Moore,  5  Munf.  (Va.)  388,  7  Am.  Dec.  688.  See, 
also,  Bank  of  U.  S.  v.  United  States,  43  U.  S.  (2  How.)  711,  11  Law. 
Ed.  257. 

134  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Old.,  Or., 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  48);  Ariz.  (§  3351);  111. 
(§  48);  Kan.  (§  55);  Md.  (§  67);  Mich.  (§  50);  Neb.  (§  48);  N.  Y.  (§  78); 
Ohio  (§  3172  t);  R.  I.  (§  56);  W^is.  (§  1676-18). 

Where  note  indorsed  to  bank  for  collection  and  after  protest  is  re- 
turned to  the  indorser,  the  latter  may  cancel  his  indorsement  to  the  bank. 
New  Haven  Mfg.  Co.  v.  New  Haven  Pulp  &  Board  Co.,  76  Conn.  126, 
55  Atl.  604.  Where  one  becomes  the  holder  of  a  note  by  delivery  under 
an  indorsement  in  blank  by  the  payee,  he  is  entitled  to  strike  out  a  sub- 
sequent indorsement  under  which  he  does  not  claim  title,  and  it  is  im- 
material whether  such  indorsement  is  restrictive  or  not.  Jerman  v.  Ed- 
wards, 29  App.  D.  C.  535. 

A  blank  indorsement  may  be  struck  out  at  the  trial.  Parks  v.  Brown, 
16  111.  454;  Hunter  v.  Hempstead,  1  Mo.  67,  13  Am.  Dec.  468.  Es- 
pecially if  such  indorsement  is  not  declared  on  in  the  petition.  Merg 
V.  Kaiser,  20  La.  Ann.  377;  Hill  v.  Buddington,  8  Rob.  (La.)  119. 

But  in  a  suit  by  a  holder  against  an  indorser,  plaintiff  will  not  be  al- 
lowed to  strike  out  the  name  of  any  indorser  prior  to  defendant.  Curry 
V.  Bank  of  Mobile,  8  Port.  (Ala.)  360. 

135  Jerman  v.  Edward,  29  App.  D.  C.  535. 


186  INDORSEMENT  AND  TRANSFER.  §148 

whose  indorsement  is  struck  out,  and  all  indorsers  subsequent  to 
him,  are  thereby  diseharged.^^^ 

Termination  op  Negotiability. 

§  148.  An  instrument  negotiable  in  its  origin  continues  to  be  ne- 
gotiable until  it  has  been  restrictively  indorsed  or  dis- 
charged by  payment  or  otherwise. 

An  instrument  negotiable  in  its  origin  continues  to  be  nego- 
tiable until  it  has  been  restrictively  indorsed  or  has  been  dis- 
charged by  payment  or  otherwise.^^^  This  rule  applies  though  the 
instrument  is  overdue,^^^  though  of  course,  in  such  case,  the  rights 
and  duties  of  the  parties  are  different,  the  instrument  becoming, 
so  far  as  the  indorser  is  concerned,  in  effect  payable  on  demand.^^^ 

Reissuance  and  Renegotiation. 

§  149.  Where  an  instrument  is  negotiated  back  to  a  prior  party, 
such  party  may,  subject  to  the  provisions  herein,  reissue 
and  further  negotiate  the  same.  But  he  is  not  entitled 
to  enforce  paj^ment  thereof  against  any  intervening  party 
to  whom  he  was  personally  liable. 

If  an  instrument  is  negotiated  back  to  a  prior  party,  such  party 
may,  subject  to  the  other  provisions  of  the  negotiable  instruments 

136  Same  sections  of  negotiable  instruments  laws  as  last  above  cited. 

137  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or,, 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  47);  Ariz.  (§  3350);  [11. 
(§  47);  Kan.  (§  54);  Md.  (§  66);  Mich.  (§  49);  Neb.  (§  47);  N.  Y.  (§  17)  \ 
Ohio  (§  3172  s);  R.  I.  (§  55);  Wis.  (§  1676-17). 

138  National  Bank  of  Washington  v.  Texas,  87  U.  S.  (20  Wall.)  72,  22 
Law.  Ed.  295;  Moore  v.  Alexander,  63  App.  Div.  100,  71  N.  Y.  Supp.  420. 

Within  the  meaning  of  garnishment  statute,  an  overdue  promissory 
note  was  held  "negotiable."  Oakdale  Mfg.  Co.  v.  Clarke  [R.  I.]  69  Atl. 
681. 

139  Patterson  v.  Todd,  18  Pa.  426,  57  Am.  Dec.  622,  12  L.  R.  A.  727; 
Rosson  V.  Carroll,  90  Tenn.  90,  16  S.  W.  66;  Moore  v.  Alexander,  63  App. 
Div.  100,  71  N.  Y.  Supp.  420.     See  ante,  chapter  IV,  §  44. 


§149  REISSUANCE  AND  RENEGOTIATION.  187 

laws,  reissue  and  further  negotiate  the  same,  but  cannot  enforce 
payment  thereof  against  any  intervening  party  to  whom  he  was 
personally  liable.^*" 

woNeg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or., 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  50);  Ariz.  (§  3353);  111. 
(§  SO);  Kan.  (§  57);  Md.  (§  69);  Mich.  (§  52);  Neb.  (§  50);  N.  Y.  (§  80); 
Ohio  (§  3172  v);  R.  I.  (§  58);  Wis.  (§  1676-20). 

See  Scott  v.  First  Nat.  Bank,  71  Ind.  445;  Montgomery  &  E.  R.  Co.  v. 
Trebles,  44  Ala.  255. 


CHAPTER  XI. 


LIABILITIES   AND   RIGHTS   OF   PARTIES. 

§  150.  In  General. 

§  151.  Of  Maker. 

§  152.  Of  Drawer. 

§  153.  Of  Acceptor. 

§  154.  Of  Indorser — Who  Deemed  an  Indorser. 

§  155.  Indorser  of  Paper  Negotiable  by  Delivery. 

§  156.  Irregular  Indorsers. 

§  157.  Bills  in  Sets. 

§  158.  Warranties — Negotiation  by  Delivery  or  Qualified  Indorsement. 

§  159.  Persons  in  Whose  Favor  Warranty  Exists. 

§  160.  Public  or  Corporate  Securities. 

§  161.  Warranties — Indorser   Without    Qualification. 

§  162.  Contract  of  General  Indorser. 

§  163.  Consecutive  and  Joint  Indorsers. 

§  164.  Special  Indorsers. 

§  165.  Indorsement  by  Broker  or  Agent. 

§  166.  Rights  of  Holder. 

§  167.  Bona  Fide  Holders. 

§  168.  Presumptions  and  Burden  of  Proof. 

§  169.  Defenses  Available  Against  Bona  Fide  Holders. 

§  170.  Incomplete  Instruments. 

§   171.  Presumption  of  Delivery. 

§  172.  Bona  Fide  Holder  May  Enforce  Payment  to  Full  Amount. 

§  173.  Holder  Not  in  Due  Course. 

§  i74.  Same — Deriving  Title  From  Holder  in  Due  Course. 

Liability  in  General. 

§  150.  No  person  is  liable  on  the  instrument  whose  signature 
does  not  appear  thereon,  except  as  herein  otherwise  ex- 
pressly provided. 

Persons  dealing  with  negotiable  paper  are  presumed  to  take 
it  on  the  faith  of  the  signatures  thereon,  and  following  this  rule 
the  negotiable  instruments  acts  provide  that,  except  for  express 

188 


§  151  OF  MAKER.  ]g9 

exceptions,  no  one  is  liable  on  an  instrument  unless  his  signature 
appears  thereon.^ 

Liability  Op  ]\Taker. 

§  151.  The  maker  of  a  negotiable  instrument  by  making  it  en- 
gages that  he  will  pay  it  according  to  its  tenor,  and  ad- 
mits the  existence  of  the  payee  and  his  then  capacity  to 
indorse. 

The  liability  of  the  maker  of  a  negotiable  instrument,  based  on 
the  mere  fact  of  its  execution  by  him,  is  measured  by  the  promise 
contained  therein,  which  is  that  he  will  pay  the  instrument  ac- 
cording to  its  tenor.2  By  making  the  instrument  he  also  admits 
the  existence  of  the  payee,  and  his  then  capacity  to  indorse.^ 

1  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La.. 
Mass..  Mo.,  Mout.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or., 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  18);  Ariz.  (§  3321);  III. 
(§  18);  Kan.  (§  25);  Md.  (§  37);  Mich.  (§  20);  Neb.  (§  18);  N.  Y.  (§  37); 
Ohio  (§  3171  q);  R.  L  (§  26);  Wis.  (§  1675-18). 

Seattle  Shoe  Co.  v.  Packard,  43  Wash.  527,  86  Pac.  845,  117  Am.  St. 
Rep.  1064. 

2  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or., 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  60);  Ariz.  (§  3363);  111. 
(§  60);  Kan.  (§  67);  Md.  (§  79);  Mich.  .(§  62);  Neb.  (§  60);  N.  Y.  (§  110); 
Ohio  (§  3173  e);  R.  I.  (§  68);  Wis.  (§  1677). 

A  collateral  agreement  that  the  maker  shall  not  be  personally  liable 
on  the  instrument  according  to  its  tenor  is  not  a  defense.  Armstrong  v. 
Scott,  36  Fed.  63;  Hirsch  v.  Oliver,  91  Ga.  554,  18  S.  E.  354;  Hodgkins 
V.  Moulton,  100  Mass.  309;  Cumings  v.  Kent,  44  Ohio  St.  92,  4  N.  E. 
710,  58  Am.  Rep.  796;  Reed  v.  Nicholson,  37  Mo.  App.  646.  But  an 
agreement  that  a  note  signed  by  trustees  of  the  school  district  shall  be 
the  note  of  the  district  is  a  good  defense  to  an  action  against  the  trustees 
individually.  Bingham  v.  Stewart,  14  Minn.  214.  An  agreement  between 
the  maker  and  the  president  of  the  payee  bank  that  the  maker  shall  not 
be  liable  is  a  good  defense  to  an  action  by  a  receiver  of  the  bank.  Higgins 
V.  Ridgway,  153  N.  Y.  130,  47  N.  E.  32. 

The  question  of  the^liability  of  the  maker  to  garnishment  at  the  in- 
stance of  a  creditor  of  the  payee,  before  maturity,  is  important.  The 
rule  is  that,  in  the  absence  of  a  specific  statute  allowing  it,  the  maker  of 


190  LIABILITIES  AND  RIGHTS  §  152 

Liability  Of  Drawer. 

§  152.  By  drawing  the  instrument  the  drawer  admits  the  exist- 
ence of  the  payee  and  his  then  capacity  to  indorse,  and 
engages  that  on  due  presentment  the  instrument  will  be 
accepted  or  paid,  or  both,  according  to  its  tenor,  and 
that  if  it  be  dishonored,  and  the  necessary  proceedings 
on  dishonor  be  duly  taken,  he  will  pay  the  amount  there- 
of to  the  holder,  or  to  any  subsequent  indorser  who  may 
be  compelled  to  pay  it.  But  the  drawer  may  insert  in 
the  instrument  an  express  stipulation  negativing  or  lim- 
iting his  own  liability  to  the  holder. 

The  drawer  also  admits  the  existence  of  the  payee,  and  his  then 
capacity  to  indorse,  and  engages  that,  on  due  presentment,  the 
instrument  will  be  accepted  or  paid,  or  both,  according  to  its 
tenor,  and  that  if  it  be  dishonored,  and  the  necessary  steps  on  dis- 
honor duly  taken,  he  will  pay  the  amount  thereof  to  the  holder, 
or  to  any  subsequent  indorser  who  may  be  compelled  to  pay  it.* 

a  negotiable  note  is  not  subject  to  garnishment  at  the  instance  of  a  cred- 
itor of  the  payee  before  maturity  of  the  note,  "because,  if  this  be  done, 
he  is  liable  to  be  made  to  pay  the  same  debt  twice  over;  and  we  find  no 
authority  for  holding  that  the  rule  is  different  when  he  executed  the 
note  with  the  knowledge  that  it  is  the  purpose  of  the  payee  to  place 
the  fund  beyond  the  reach  of  his  creditors."  Willis  v.  Heath,  75  Tex. 
124,  12  S.  W.  971,  16  Am.  St.  Rep.  876.  Indorsee  of  note  executed  by  ten 
persons  cannot  maintain  joint  action  against  all,  the  note  providing  that 
the  liability  of  each  was  limited  to  one-tenth  the  amount  of  the  note. 
National  Bank  v.  Buckwalter,  214  Pa.  289,  63  Atl.  689. 

3  Same  sections  of  negotiable  instruments  laws  as  last  above  cited. 
Instruments  payaible  to  the  order  of  a  fictitious  person  are  payable  to 

bearer.  See  ante,  §  51.  That  defendants  issued  and  delivered  check  "to 
an  imposter  who  falsely  claimed  to  represent  an  association  of  'freight 
handlers'  "  is  no  defense  as  against  a  bona  fide  holder.  Boles  v.  Hard- 
ing, 201  Mass.  103,  87  N.  E.  481. 

4  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or., 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.   (§  61);  Ariz.   (§  3364);  III'. 


§153  OF    ACCEPTOR.  191 

The  drawer  may,  however,  insert  in  the  instrument  a  stipulation 
negativing  or  limiting  his  own  liability  to  tlie  holder,^  tlie  tlieory 
being  that  an  express  stipulation  of  this  kind  conveys  to  the  hold- 
er actual  notice  of  the  limitation  of  liability.  By  virtue  of  this 
provision  an  instrument  may  be  drawn  "without  recourse"  on  the 
drawer. 

Liability  of  Acceptor. 

§  153.  The  acceptor  by  accepting  the  instrument  engages  that 
he  will  pay  it  according  to  the  tenor  of  his  acceptance, 
and  admits: 

1.  The  existence  of  the  drawer,  the  genuineness  of  his 

signature,  and  his  capacity  and  authority  to  draw 
the  instrument ;  and 

2.  The  existence  of  the  payee  and  his  then  capacity  to 

indorse. 

The  drawee  of  a  bill,  who,  as  we  have  seen,  is  a  mere  stranger 
without  liability  before  acceptance,^  becomes  on  acceptance  a 
principal  debtor,'^  and  engages  to  pay  the  bill  according  to  the 

(§  61);  Kan.  (§  68);  Md.  (§  80);  Mich.  (§  63);  Neb.  (§  61);  N.  Y.  (§  111); 
Ohio  (§  3173  0;  R.  I.  (§  69);  Wis.  (§  1677-1). 

The  drawer  is  discharged  where  the  payee  transmits  the  draft  by  mail, 
and  fails  to  discover  its  loss  for  six  rnonths.  Bank  of  Gilby  v.  Farns- 
v.orth,  7  N.  D.  6,  72  N.  W.  901,  38  L.  R.  A.  843.  But  a  promise  by  the 
drawer  to  pay  made  with  knowledge  of  the  facts  is  a  waiver  of  his  right 
to  such  discharge.     Id. 

5  Same  sections  of  negotiable  instruments  laws  as  last  above  cited. 
For  various  agreements  qualifying  or  limiting  the  liability  of  the  maker 

or  drawer,  see  Collins  v.  Seay,  35  Ala.  347;  King  v.  King,  69  Ind.  467; 
Montgomery  v.  Page,  29  Or.  320,  44  Pac.  689;  Commercial  Bank  v. 
Hart,  10  Wash.  303,  38  Pac.  1114. 

6  See  ante,  §  88. 

7  Capital  City  Ins.  Co.  v.  Quinn,  73  Ala.  558;  Parmelee  v.  Williams,  72 
Ga.  42;  Trimble  v.  City  Nat.  Bank,  12  Ky.  Law  Rep.  909,  IS  S.  W.  853; 
Green  v.  Goings,  7  Barb.  (N.  Y.)  652.  A  bill  when  accepted  becomes 
similar  to  a  promissory  note,  the  acceptor  being  the  promisor,  and  the 
drawer  standing  in  the  relation  of  an  indorser.  Haddock,  Blanchard  & 
Co.  V.  Haddock,  192  N.  Y.  499,  85  N.  E.  682,' a fg.  118  App.  Div.  412,  103 


192  LIABILITIES  AND  RIGHTS.  §  153 

tenor  of  the  acceptance.^  By  the  acceptance  the  acceptor  also  ad- 
mits the  existence  of  the  drawer  and  the  genuineness  of  his  sig- 
nature,^ for  it  is  incumbent  upon  the  drawee  of  a  bill  to  be  satis- 
fied that  th^  signature  of  the  drawer  is  genuine,  as  he  is  presumed 
to  know  the  drawer's  handwriting;  and,  if  the  drawee  accepts 
or  pays  the  bill  to  which  the  drawer's  name  has  been  forged,  he 
can  neither  repudiate  the  acceptance  nor  recover  the  money 
paid,^o  even  from  the  person  to  whom  it  was  paid,  the  latter  not 
being  the  forger,  although  the  position  of  the  parties  to  such  per- 
son has  not  changed  in  any  respect.^^  In  such  case  the  drawee 
can  acquire  no  rights  as  against  the  person  to  whom  payment  was 

N.  Y.  Supp.  584.  The  acceptor  of  a  bill  of  exchange  becomes  primarily- 
liable  for  its  payment,  and  is  to  be  considered  the  principal  debtor; 
and  this  is  true  even  if  the  acceptance  was  for  the  accommodation  of  the 
drawer,  the  acceptor  having  no  funds  of  the  drawer  in  his  hands  to  pay- 
it.  Huston  V.  Newgass,  234  111.  285,  84  N.  E.  910.  But  see  Canadian 
Bank  of  Commerce  v.  Coumbe,  47  Mich.  358,  11  N.  W.  196,  where  it 
was  held  that  a  payee  with  notice  that  an  acceptance  was  for  accommo- 
dation cannot  treat  the  acceptor  as  a  principal  debtor,  but  can  treat  him 
as  a  surety  only.  As  a  general  rule  an  accommodation  acceptor  is  con- 
sidered to  be  a  surety  as  between  himself  and  the  drawer.  Child  v. 
Eureka  Powder  Works,  44  N.  H.  354;  In  re  Babcock,  Fed.  Cas.  No.  696. 

8  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or., 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  62);  Ariz.  (§  3365);  111. 
(§  62);  Kan.  (§  69);  Md.  (§  81);  Mich.  (§  64);  Neb.  (§  62);  N.  Y.  (§  112); 
Ohio  (§  Z\72,g);  R.  L  (§  70);  Wis.  (§  1677-2). 

Greene  v.  Duncan,  2,7  S.  C.  239,  15  S.  E.  956. 

Damages  recoverable  on  protest  of  foreign  bill,  "see  post,  §  211. 

9  Same  sections  of  negotiable  instruments  laws  as  last  aboVe  cited. 
Price  V.  Neal,  3  Burrows,  1354;  United  States  Bank  v.  Bank  of  Georgia, 

33  U.  S.  (10  Wheat.)  2>2,Z,  6  Law.  Ed.  334;  White  v.  Continental  Nat. 
Bank,  64  N.  Y.  316,  21  Am.  Rep.  612;  Holt  v.  Ross,  54  N.  Y.  472,  13  Am. 
Rep.  615;  Star  Fire  Ins.  Co.  v.  New  Hampshire  Nat.  Bank,  60  N  H.  442; 
Adam  v.  Manufacturers'  &  Traders'  Nat.  Bank,  63  Misc.  403,  116  N.  Y. 
Supp.  595. 

10 Title  Guarantee  &  Trust  Co.  v.  Haven,  126  App.  Div.  802,  111  N. 
Y.  Supp.  305. 

11  Title  Guarantee  &  Trust  Co.  v.  Haven,  126  App.  Div.  802,  111  N. 
Y.  Supp.  305. 


§  153  OF    ACCEPTOR.  103 

made  or  any  person  interested  in  sustaining  the  paj'^nient  as  valid,^' 
nor  can  he  be  subrogated  to  the  rights  of  any  siu-li  paity.'-  lie 
also  admits  the  drawer's  capacity^*  and  authority  ^^  ^q  draw  the 
instrument,  the  existence  of  the  payee  and  his  then  capacity  to 
indorse,^^  and  the  existence  of  funds  of  the  drawer  in  his  hands," 
The  acceptor  is  liable  as  well  to  a  holder  who  took  before  the  ac- 
ceptance as  to  one  who  took  after,^^  ^nd  is  not  discharged  by  fail- 
ure of  the  holder  to  sue  the  drawer/^  or  by  a  refusal  of  the  holder 
to  allow  the  acceptor  to  take  up  the  bill  a,t  maturity .20  The  ac- 
ceptor cannot  show  that  his  acceptance,  absolute  on  its  face,  was 
in  fact  conditional,^^  nor  can  he  show,  as  a^rainst  the  payee,  a  sub- 
sequent agreement  between  himself  and  the  drawer  modifying 
the  terms  of  the  acceptance."^  If  the  drawee  accepts  uncondi- 
tionally while  in  funds,  he  cannot  show,  as  against  the  payee,  that 
the  drawer  had  previously  assigned  the  funds,  the  payee  having 
been  ignorant  of  the  assignment  at  the  time  he  took  the  bill.-'^  If 
the  drawee  accepts,  in  his  individual  capacity,  a  bill  drawn  on 


12  Title  Guarantee  &  Trust  Co.  v.  Haven,  126  App.  Div.  802,  111  N. 
Y.  Supp.  305. 

13  Title  Guarantee  &  Trust  Co.  v.  Haven,  126  App.  Div.  802,  111  N. 
Y.  Supp.  305. 

1*  Same  sections  of  negotiable  instruments  laws  as  last  above  cited. 

Acceptor  of  bill  drawn  by  married  woman  is  estopped  to  deny  her 
competency.     Cowton  v.  Wickersham,  54  Pa.  302. 

15  Same  sections  of  negotiable  instruments  laws  as  last  above  cited. 

^6  Same  sections  of  negotiable  instruments  laws  as  last  above  cited. 

17  This  provision  is  not  in  the  negotiable  instruments  laws,  but  is  a 
general  rule  of  law.  See  cases  cited  in  §  96,  and  Bradley  v.  McClellan,  11 
Tenn.  (3  Yerg.)  301;  Jordan  v.  Tarkington,  15  N.  C.   (4  Dev.)  357. 

iSHeuertematte  v.  Morris,  101  N.  Y.  63,  4  N.  E.  1,  54  Am.  Rep.  657; 
Iselin  V.  Chemical  Nat.  Bank,  16  Misc.  437,  40  N.  Y.  Supp.  388;  Credit  Co. 
V.  Howe  Mach.  Co.,  54  Conn.  357,  8  Atl.  472,  1  Am.  St.  Rep.  123;  Arpin 
V.  Owens,  140  Mass.  144,  3  N.  E.  25. 

i9Diversy  v,  Moor,  22  111.^31,  74  Am.  Dec.  157. 

20  Williams  v.  Theodore,  34  La.  Ann.  89.  But  see  First  Nat.  Bank  v. 
Day,  64  Iowa,  118,  19  N.  W.  882,  where  the  acceptor  was  held  to  be  dis- 
charged by  an  agreement  not  to  sue  him. 

21  Flournoy  v.  First  Nat.  Bank,  79  Ga.  810,  2  S.  E.  547. 

22  Mason  v.  Graff,  35  Pa.  448. 

23  Tucker  v.  Welsh,  17  Mass.  160,  9  Am.  Dec.  137. 


Opp. — Sel. — 13 


394  LIABILITIES  AND  RIGHTS.  §15^ 

him  as  agent  or  other  representative,  he  becomes  personally  lia- 
ble ;  2^  but  an  acceptance,  in  a  representative  capacity,  of  a  bill 
drawn  on  the  drawee  as  an  individual,  negatives  an  intent  to  be- 
come personally  liable,  and  is  not  a  sufficient  acceptance  of  the 
bill.2^  By  this  assent  or  acceptance  the  drawee  undertakes  to  pay 
the  bill  at  maturity  ^^  in  money .^^ 

By  certifying  a  check  on  a  deposit  with  it,  a  bank  estops  itself 
to  deny  the  existence  of  the  drawer,  the  genuineness  of  his  sig- 
nature, and  the  sufficiency  of  funds  to  pay  the  check,  and 
promises  to  pay  it  on  demand.^^  The  bank,  by  certifying  a 
check,  admits  also  the  existence  of  the  payee,  and  his  then  capac- 

24  Arnold  v.  Sprague,  34  Vt.  402;  Taber  v.  Cannon,  49  Mass.  (8  Mete.) 
456;  Lallerstedt  v.  Griffin,  29  Ga.  708. 

25  Walker  v.  Bank  of  State  of  New  York,  13  Barb.  (N.  Y.)  636.  Di- 
rectors of  a  corporation  whose  charter  does  not  give  authority  to  accept 
bills  of  exchange  are  personally  liable  on  their  acceptances  purporting 
to  be  for  the  company.  West  London  Commercial  Bank  v.  Kitson,  13 
Q.  B.  Div.  360. 

26  Hoffman  v.  Bank  of  Milwaukee,  79  U.  S.  (12  Wall.)  181,  20  Law. 
Ed.   366. 

2"  Same  sections  of  negotiable  instruments  laws  as  last  above  cited, 
and  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or., 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  1);  Ariz.  (§  3304);  111. 
(§  1);  Kan.  (§  8);  Md.  (§  20);  Mich.  (§  3);  Neb.  (§  1);  N.  Y.  (§  20); 
Ohio  (§  3171);  R.  I.  (§  9);  Wis.  (§  1675-1). 

28  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J  ,  N.  M.,  N.  C,  N.  D.,  Old.,  Or., 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  62);  Ariz.  (§  3365);  111. 
(§  62);  Kan.  (§  69);  Md.  (§  81);  Mich.  (§  64);  Neb.  (§  62);  N.  Y.  (§  112); 
Ohio  (§  3173  g);  R.  I.  (§  70);  Wis.  (§  1677-2). 

Marine  Nat.  Bank  v.  National  City  Bank,  59  N.  Y.  67,  17  Am.  Rep. 
305;  Willets  v.  Phoenix  Bank,  9  N.  Y.  Super  Ct.  (2  Duer)  121.  The 
certificate  by  a  bank  that  a  check  is  good  is  equivalent  to  acceptance,  and 
raises  an  implication  that  it  is  drawn  upon  sufficient  funds  in  the  hands 
of  the  drawee,  that  they  have  been  set  apart  for  its  satisfaction,  and 
that  they  shall  be  so  applied  whenever  the  check  is  presented  for  pay- 
ment. Blake  v.  Hamilton  Dime  Sav.  Bank  Co.,  79  Ohio  St.  189,  87  N.  E. 
72,,  20  L.  R.  A.  (N.  S.)  290.  The  transfer  of  a  certified  check  is  an  as- 
signment of  money  to  meet  it,  and  the  bank  making  the  certification  is 
liable  therefor  to  the  holder.    Id. 


§  154  OF  INDORSEE.  195 

ity  to  indorse  the  cheek,^^  but  "does  not  admit  the  genuineness  of 
the  indorser's  signature.^"  Certification  of  a  check  operates  as 
an  assignment,^!  and  the  object  of  certifying  being  to  enable  a 
holder  to  use  the  check  as  money,  the  drawer  or  indorser  of  a 
certified  check  cannot,  after  its  delivery,  revoke  it  or  stop  pay- 
ment upon  it  by  notice  to  the  drawee  not  to  pay.^^  -q^i  a  bank  is 
not  liable  on  a  check  certified  by  it  and  payable  to  order,  where 
it  is  cashed  by  another  bank  without  the  indorsement  of  the 
payee 


33 


Of  Indorser — Who  Deemed  An  Indorsee. 

§  154.  A  person  placing  his  signature  upon  an  instrument  other 
wise  than  as  maker,  drav/er  or  acceptor,  is  deemed  to  be 
an  indorser,  unless  he  clearly  indicates  by  appropriate 
words  his  intention  to  be  bound  in  some  other  capacity. 

Following  the  apparent  general  policy  of  the  act  to  make  irreg- 
ular parties  indorsers,  the  negotiable  instruments  acts  provide 
that  where  a  signature  is  so  placed  upon  the  instrument  that  it 
is  not  clear  in  what  capacity  the  person  making  the  same  intended 
to  sign,  he  is  deemed  an  indorser.^*  This  rule  applies  only  to  cases 
of  doubt  arising  out  of  the  location  of  the  signature  on  the  in- 
strument, and  does  not  apply  where  the  doubt  is  as  to  whether 

29  Same  sections  of  negotiable  instruments  laws  as  last  above  cited. 
But  see  First  Nat.   Bank  v.  Northwestern   Nat.   Bank,  152  111.  296,  38 

N.  E.  739,  43  Am.  St.  Rep.  247,  26  L.  R.  A.  289. 

30  First  Nat.  Bank  v.  Northwestern  Nat.  Bank,  152  111.  296,  38  N.  E. 
739,  43  Am.  St.  Rep.  247,  26  L.  R.  A.  289. 

siMeuer  v.  Phenix  Nat.  Bank,  94  App.  Div.  331,  88  N.  Y.  Supp.  83. 

32  Blake  V.  Hamilton  Dime  Sav.  Bank  Co.,  79  Ohio  St.  189,  87  N.  E.  73, 
20  L.  R.  A.  (N.  S.)  290. 

33  Goshen  Nat.  Bank  v.  Bingham,  118  N.  Y.  349,  23  N.  E.  180,  16  Am. 
St.  Rep.  765,  T  L.  R.  A.  595. 

34  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or., 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  17);  Ariz.  (§  3320);  111. 
(§  17);  Kan.  (§  24);  Md.  (§  36);  Mich.  (§  19);  Neb.  (§  17);  N.  Y.  (§  36); 
Ohio  (§  3171  p);  R.  L  (§  25);  Wis.  (§  1675-17). 


196  LIABILITIES  AND  RIGHTS.  §  154 

the  party  intended  to  sign  in  an  individual  or  in  a  representative 
capacity  as  maker.^^  Under  this  provision,  if  a  bill  is  drawn  to 
the  order  of  the  drawer,  one  who  writes  his  name  across  the  face 
of  the  instrument  is  an  indorser,  not  an  acceptor.^^ 

Consistent  with  and  following  the  above  mentioned  rule,  the 
negotiable  instruments  acts  provide  that  one  placing  his  signature 
on  an  instrument  otherwise  than  as  maker,  drawer,  or  acceptor,  is 
deemed  to  be  an  indorser,  unless  he  clearly  indicates  by  appropri- 
ate words  his  intention  to  be  bound  in  some  other  capacity;^''  a 
party's  status  being  fixed  by  this  rule,  parol  evidence  is  not  ad- 
missible to  alter  it.-'^^  It  follows  that  persons  placing  their  sig- 
natures on  the  back  of  the  note  before  delivery  for  the  accom- 
modation of  the  maker  are  indorsers  and  cannot  be  held  as  joint 


33  Germania  Nat.  Bank  v.  Mariner,  129  Wis.  544,  109  N.  W.  574. 

36  Walton  V.  Williams,  44  Ala.  347. 

37  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  li.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or., 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  63);  Ariz.  (§  3366);  111. 
(§  63);  Kan.  (§  70);  Md.  (§  82);  Mich.  (§  65);  Neb.  (§  63);  N.  Y.  (§  113); 
Ohio  (§  3173  h);  R.  L  (§  71);  Wis.  (§  1677-3). 

Walker  v.  Dunham,  135  Mo.  396,  115  S.  W.  1086;  Roessler  v.  Lan- 
caster, 130  App.  Div.  1,  114  N.  Y.  Supp.  387;  Rockfield  v.  First  Nat.  Bank, 
11  Ohio  St.  311,  83  N.  E.  392,  14  L.  R.  A.  (N.  S.)  842;  Downey  v.  O'Keefe, 
26  R.  I.  571,  59  Atl.  929;  Thorpe  v.  White,  188  Mass.  333,  74  N.  E.  592; 
Toole  V.  Crafts,  193  Mass.  110,  78  N.  E.  775,  118  Am.  St.  Rep.  455;  Far- 
qnhar  v.  Hieham,  16  N.  D.  106,  112  N.  W.  557;  Gibbs  v.  Guaraglia,  75  N. 
J.  Law,  168,  67  Atl.  81;  Wilson  v.  Hendee,  74  N.  J.  Law,  640,  66  Atl 
413;  Baumeister  v.  Kuntz,  53  Fla.  340,  42  So.  886;  Far  Rockaway  Bank 
V.  Norton,  186  N.  Y.  484,  79  N.  E.  709;  Vander  Ploeg  v.  Van  Zuuk,  135 
Iowa,  350,  112  N.  W.  807,  124  Am.  St.  Rep.  275;  Mercantile  Bank  v. 
Busby  (Tenn.)  113  S.  W.  390.  This  abrogates  the  old  rule  declared  in 
some  states  (see  Chaddock  v.  Vanness,  35  N.  J.  Law,  517,  10  Am.  Rep. 
256)  that  the  signature  of  a  third  party  upon  the  back  of  a  negotiable 
instrument  prior  to  its  ,4elivery  to  the  payee  creates  no  implied  or  com- 
mercial contract  whate'^er  (Wilson  v.  Hendee,  74  N.  J.  Law,  640,  66 
Atl.  413).  A  partner  by  individually  indorsing  a  firm  note  becomes  an 
indorser  as  well  as  maker.  National  Exch.  Bank  v.  Lubrano  (R.  I.)  68 
Atl.  944.  Placing  one's  name  on  the  back  of  a  note  prior  to  delivery.  Bank 
of  Montpelier  v.  Montpelier  Lumber  Co.   (Idaho)   102  Pac.  685. 

Liability  or  irregular  indorser,  see  post,  §  156. 
38Baumeister  v.   Kuntz,   53   Fla.  340,  42  So.   886. 


§  155  OF  INDORSER.  197 

makers  on  the  ground  that  the  holder  would  not  have  taken  the 
note  without  their  signatures.^^  Following  this  rule,  it  has  been 
held  that  the  signing  of  a  guaranty  of  payment,  combined  witii 
waiver  of  demand,  notice  and  protest,  constitues  the  signers  ol' 
such  an  indorsement,  who  are  payees  of  the  note,  indorsers  and 
not  guarantors,^"^  and  that  adding  a  guaranty  subsequent  to  one's 
indorsement  does  not  change  or  affect  the  character  of  the  lat- 
ter.*^ Being  indorsers,  such  persons  are  entitled  to  demand,  pro- 
test and  notice.*^ 


§  155.  Where  a  person  places  his  indorsement  on  an  instrument 
negotiable  by  delivery,  he  incurs  all  the  liabilities  of  an 
indorser. 

A  person  who  places  his  indorsement  on  an  instrument  nego- 
tiable by  delivery  incurs  all  the  liabilities  of  an  indorser.^  This 
is  true,  of  course,  whether  the  indorsement  is  for  accommodation 
or  is  placed  on  the  instrument  in  ignorance  of  the  fact  that  it  is 
negotiable  by  delivery  and  that  the  indorsement  is  unnecessary. 
The  rule  holds  also  where  the  indorsement  is  coupled  with  a  guar- 
anty of  payment.** 


39Deahy  v.  Choquet,  28  R.  I.  338,  67  Atl.  421,  14  L.  R.  A.  (N.  S.)  847. 

40Voss  V.  Chamberlain,  139  Iowa,  569,  117  N.  W.  269. 

*i  Elgin  City  Banking  Co.  v.  Hall  (Tenn.)  108  S.  W.  1068. 

42Rockfield  v.  First  Nat.  Bank,  11  Ohio  St.  311,  83  N.  E.  392,  14  L.  R. 
A.  (N.  S.)  842;  J.  W.  Perry  Co.  v.  Taylor  Bros.,  148  N.  C.  362,  62  S. 
E.  423. 

*3  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or.! 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  67);  Ariz.  (§  3370);  III' 
(§  67);  Kan.  (§  74);  Md.  (§  86);  Mich.  (§  69);  Neb.  (§  67);  N.  Y.  (§  117); 
Ohio  (§  3173  1);  R.  I.  (§  75);  Wis.  (§  1677-7). 

Doom  V.  Sherwin,  20  Colo.  234,  38  Pac.  56;  Tillman  v.  Allies,  5  Smedes 
&  M.  373;  Brush  v.  Reeves'  Adm'rs,  3  Johns.  (N.  Y.)  439. 
«  Leggett  V.  Raymond,  6  Hill  (N.  Y.)  639. 


198  LIABILITIES  AND  RIGHTS-  §  15ti. 

Same —  Liability  op  Irregular  Tndorseb. 

§  156.  Where  a  person,  not  otherwise  a  party  to  an  instrument, 
places  thereon  his  signature  in  blank  before  delivery, 
he  is  liable  as  indorser  in  accordance  with  the  follow- 
ing rules: 

1.  If  the  instrument  is  payable  to  the  order  of  a  third 

person,  he  is  liable  to  the  payee  and  to  all  subse- 
quent parties; 

2.  If  the  instrument  is  payable  to  the  order  of  the 

maker  or  drawer,  or  is  payable  to  bearer,  he  is 
liable  to  all  parties  subsequent  to  the  maker  or 
drawer ; 

3.  If  he  signs  for  the  accommodation  of  the  payee,  he 

is  liable  to  all  parties  subsequent  to  the  payee. 

The  courts  differ  widely  as  to  the  status  and  liability  of  a  per- 
son not  otherwise  a  party,  who  places  his  signature  in  blank  on 
a  negotiable  instrument  before  delivery.  The  weight  of  authority 
has  classed  such  a  person  as  a  joint  maker,^^  but  he  has  been  held 
by  some  courts  to  he  an  indorser,*^  and  by  others  to  be  a  guar- 
ds Byers  v.  Tritch,  12  Colo.  App.  377,  55  Pac.  622;  Allen  v.  Brown,  124 
Mass.  77;  Gumz  v.  Giegling,  108  Mich.  295,  66  N.  W.  48;  Stein  v.  Pass- 
.nore,  25  Minn.  256;  McCallum  v.  Driggs,  35  Fla.  277,  17  So.  407;Salis- 
bury  V.  First  Nat.  Bank,  37  Neb.  872,  56  N.  W.  727,  40  Am.  St.  Rep.  527; 
.ackson  Bank  v.  Irons,  18  R.  I.  718,  30  Atl.  420.  But  see  Moorman  v. 
Wood,  117  Ind.  144,  19  N.  E.  739. 

46  Fisk  V.  Miller,  63  Gal.  367;  Davis  v.  Barron,  13  Wis.  254.  The  status 
of  such  a  signer  has  also  been  held  to  be  that  of  a  second  indorser. 
Bogue  V.  Melick,  25  111.  91;  Collins  v.  Everett,  4  Ga.  266;  Baker  v.  Mar- 
tin, 3  Barb.  (N.  Y.)  634;  Lester  v.  Paine,  39  Barb.  (N.  Y.)  616;  Deering 
V.  Creig-hton,  19  Or.  118,  24  Pac.  198,  20  Am.  St.  Rep.  800.  But  evidence 
was  admissible  to  show  that  the  indorsement  was  made  for  accommo- 
dation, in  which  case  the  status  would  be  that  of  a  first  indorser.  Coul- 
ter V.  Richmond,  59  N.  Y.  478.  On  the  rights  and  liabilities  of  anomalous 
or  irregular  indorsers,  see,  also,  Seabury  v.  Hungerford,  2  Hill  (N.  Y.) 
80;  Hall  v.  Newcomb,  7  Hill  (N.  Y.)  416,  42  Am.  Dec.  82;  Union  Bank 
v.  Willis,  49  Mass.  (8  Mete.)  504,  22  S.  W.  211,  36  Am.  St.  Rep.  100;  Fes- 
senden  v.  Summers,  62  Cal.  484;  Bank  of  Jamaica  v.  Jefferson,  92  Tenn. 
537,  41  Am.  Dec.  541. 


§156  OF  IRREGULAR  INDORSER.  199 

antor,^  and  by  still  others  to  be  a  mere  surety.*^  The  negotiable 
instruments  laws  settle  the  difficulty  by  providing  that  such  a 
signer  shall  be  liable  as  indorser  according  to  the  following  rules : 

"  (1)  If  the  instrument  is  payable  to  the  order  of  a  third  person, 
he  is  liable  to  the  payee  and  to  all  subsequent  parties."*^ 

"  (2)  If  the  instrument  is  payable  to  the  order  of  the  maker  or 
drawer,  or  is  payable  to  bearer,  he  is  liable  to  all  parties  sub- 
sequent to  the  maker  or  drawer. ' '  ^ 

"(3)  If  he  signs  for  the  accommodation  of  the  payee,  he  is 
liable  to  all  parties  subsequent  to  the  payee.  "^^ 

This  section  should  be  construed  with  the  other  sections  of  the 
act,^^  and  when  so  construed  is  limited  in  its  application  to  the  lia- 
bility of  the  parties  where  the  paper  is  with  the  public  as  a  nego- 


47  Portsmouth  Sav.  Bank  v.  Wilson,  5  App.  D.  C.  8;  Varley  v.  Title 
Guarantee  &  Trust  Co.,  60  111.  App.  565;  Arnold  v.  Bryant,  71  Ky.  (8 
Bush)  668. 

48Killian  v.  Ashley,  24  Ark.  511,  91  Am.  Dec.  519;  Rogers  v.  Gibbs,  24 
La.  Ann.  468. 

*9  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or., 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  64);  Ariz.  (§  3367);  111. 
(§  64);  Kan.  (§  71);  Md.  (§  83);  Mich.  (§  66);  Neb.  (§  64);  N.  Y.  (§  114); 
Ohio  (§  3173  i);  R.  I.  (§  72);  Wis.  (§  1677-4). 

A.  B.  Farquhar  Co.  v.  Higham,  16  N.  D.  10,  112  N.  W.  557;  Guttman  v. 
Abbott,  110  N.  Y.  Supp.  376.  In  a  recent  New  York  case  it  was  held  that 
where  an  action  on  a  note  was  begun  before  the  passage  of  the  nego- 
tiable instruments  law,  the  complaint  alleging  execution  of  the  note  by 
defendant,  and  its  delivery,  should  have  alleged  that  the  note  was  in- 
dorsed to  give  credit  to  the  maker,  or  as  surety  for  him,  as  required  by 
statute  prior  to  the  passage  of  the  negotiable  instruments  laws,  and  that 
th-^  defect  was  not  cured  by  section  114  of  said  law.  McMoran  v.  Lange, 
25  App.  Div.  11,  48  N.  Y.  Supp.  1000. 

50  Subdivision  2  of  same  sections  of  negotiable  instruments  laws  as  last 
above  cited. 

51  Subdivision  3  of  same  sections  of  negotiable  instruments  laws  as  last 
above  cited. 

52  Neg.  Inst,  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or., 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  68):  Ariz.  (§  3371);  IlL 
(§  68);  Kan.  (§  75);  Md.  (§  87);  Mich.  (§  70);  Neb.  (§  68);  N.  Y.  (§  118); 
Ohio  (§  3173  m);  R.  I.  (§  76);  Wis.  (§  1677-8). 


200  LIABILITIES  AND  RIGHTS.  §156 

tiable  instrument,^^  and  does  not  govern  the  rights  of  an  indorser 
before  delivery  as  against  a  maker  of  a  bill,^*  nor  does  it  define 
the  rights  and  liabilities  of  several  irregular  indorsers  as  between 
themselves.^5 

This  section  changes  the  law  in  many  of  the  states,^^  and  has 
been  held  in  New  York  to  apply  only  to  indorsement  before  de- 
livery .^'^  Actual  ownership  of  commercial  paper  and  use  thereof 
by  the  owner  are  essential  to  sustain  irregular  indorsements.^^ 
As  to  indorsers  signing  for  the  accommodation  of  the  maker  be- 
fore indorsement  by  the  payee,  the  defenses  of  invalidity  and 
want  of  consideration  are  open  in  the  same  way  as  they  would  be 
in  an  action  against  the  maker.^^  In  cases  arising  under  the  third 
subdivision,  parol  evidence  is  admissible  and  necessary  to  estab- 
lish whether  the  indorser  signed  for  the  accommodation  of  the 
payee.^° 

53  Haddock,  Blanchard  &  Co.  v.  Haddock,  118  App.  Div.  412,  103  N. 
Y.  Supp.  584. 

54  Haddock,  Blanchard  &  Co.  v.  Haddock,  192  N.  Y.  499,  85  N.  E.  682, 
19  L.  R.  A.  (N.  S.)  136,  afg.  118  App.  Div.  412,  103  N.  Y.  Supp.  584.  See 
post,  §  162. 

55  Wilson  V.  Hendce,  74  N.  J.  Law,  640,  66  Atl.  413.     See  post,  §  163. 

56  Far  Rockaway  Bank  v.  Norton,  186  N.  Y.  484,  79  N.  E.  709,  afg.  110 
App.  Div.  917,  96  N.  Y.  Supp.  1124;  Roessler  v.  Lancaster,  130  App.  Div. 
1,  114  N.  Y.  Supp.  387.  One  who  indorses  negotiable  paper  in  blank  be- 
fore .delivery  to  give  credit  to  the  acceptor  is  deemed  an  indorser.  Had- 
dock, Blanchard  &  Co.  v.  Haddock,  192  N.  Y.  499,  85  N.  E.  682,  afg.  118 
App.  Div.  412,  103  N.  Y.  Supp.  584.  This  changes  the  New  York  rule 
that  such  a  party  is  presumably  a  second  indorser  and  not  liable  to  the 
payee,  though  this  presumption  was  rebuttable  by  parol  evidence.  Id. ; 
Gibbs  V.  Guaraglia,  75  N.  J.  Law,  168,  67  Atl.  81.  A  person  who,  being 
a  stranger  to  a  promissory  note,  places  his  name  on  the  back  by  blank 
indorsement,  is  an  indorser  of  the  paper  and  cannot  be  held  in  any  other 
capacity.  Rockfield  v.  First  Nat.  Bank,  11  Ohio  St.  311,  83  N.  E.  392,  14 
L.  R.  A.  (N.  S.)  842. 

67  Kohn  V.  Consolidated  Butter  &  Egg  Co.,  63  N.  Y.  Supp.  265. 

58  Seaboard  Nat.  Bank  v.  Bank  of  America,  193  N.  Y.  26,  85  N.  E.  829, 
afg.  51  Misc.  103,  100  N.  Y.  Supp.  740,  and  118  App.  Div.  907,  103  N.  Y. 
Supp.   1141. 

59  Leonard  v.  Draper,  187  Mass.  536,  73  N.  E.  644. 

60  Haddock,  Blanchard  &  Co.  v.  Haddock,  192  N.  Y.  499,  85  N.  E.  682, 
afg.  118  App.  Div.  412,  103  N.  Y.  Supp.  584;  Mercantile  Bank  v.  Busby 
(Tenn.)   113  S,  W.  390. 


§  159  WARRANTIES.  301 

Like  other  indorsers,  the  liability  of  an  irregular  indorser  is 
contingent  upon  failure  of  the  maker  to  pay,  accompanied  by  due 
demand,  notice  and  protest.^^ 


Bills  in  Sets. 

§  157.  Where  the  holder  of  a  set  indorses  two  or  more  parts  to 
different  persons,  he  is  liable  on  every  such  part,  and 
every  indorser  subsequent  to  him  is  liable  on  the  part 
he  has  himself  indorsed,  as  if  such  parts  were  separate 
bills. 

A  holder  who  indorses  two  or  more  parts  of  a  set  to  different 
persons  is  liable  on  each  part,  and,  generally,  every  indorser  sub- 
sequent to  him  is  liable  on  the  part  he  has  himself  indorsed,  as 
if  such  part  were  a  separate  bill.^^ 

Warranties. 

§  158.    Every  person  negotiating  an  instrument  by  delivery,  or 
by  a  qualified  indorsement,  warrants : 

1.  That  the  instrument  is  genuine  and  in  all  respects 

what  it  purports  to  be; 

2.  That  he  has  a  good  title  to  it; 

3.  That  all  prior  parties  had  capacity  to  contract; 

4.  That  he  has  no  knowledge  of  any  fact  which  would 

impair  the  validity  of  the  instrument  or  render  it 
valueless. 

§  159.  But  when  the  negotiation  is  by  delivery  only,  the  war- 
ranty extends  in  favor  of  no  holder  other  than  the  im- 
mediate transferee. 

61  Guttman  v.  Abbott,  110  N.  Y.  Supp.  376;  Rockfield  v.  First  Nat.  BanK- 
n  Ohio  St.  311,  83  N.  E.  392,  14  L.  R.  A.  (N.  S.)  842. 

62  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La. 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.'  Or.'. 
Pa.,  Tcnn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  180);  Ariz.  (§  3483);   111' 


202  LIABILITIES  AND  RIGHTS.  §  lUO 

§  160.  The  provisions  of  subdivision  three  do  not  apply  to  per- 
sons negotiating  public  or  corporate  securities  other  than 
bills  and  notes. 

Every  person  negotiating  an  instrument  by  delivery  or  by  a 
qualified  indorsement  warrants  that  it  is  genuine  and  in  all  re- 
spects what  it  purports  to  be  ;^^  that  he  has  a  good  title  to  it;^* 
that  all  prior  parties  had  capacity  to  contract^^  (this  does  not 
apply  to  persons  negotiating  public  or  corporate  securities  other 
than  bills  and  notes)  ;  ^^  that  he  has  no  knowledge  of  any  fact  that 
would  impair  the  validity  of  the  instrument  or  render  it  value- 

(§  179);  Kan.  (§  187);  Md.  (§  199);  Mich.  (§  182);  Neb.  (§  179);  N.  Y. 
(§  312);  Ohio  (§  3177  q);  R.  I.  (§  188);  Wi^s.  (§  1681-37). 

63  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or., 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  65);  Ariz.  (§  3368);  111. 
(§  65);  Kan.  (§  72);  Md.  (§  84);  Mich.  (§  67);  Neb.  (§  65);  N.  Y.  (§  115); 
Ohio  (§  3173  j);  R.  I.  (§  7Z);  Wis.  (§  1677-5). 

Barton  v.  Trent,  40  Tenn.  (3  Head)  167;  Meyer  v.  Richards,  163  U.  S. 
385,  41  Law.  Ed.  199;  Littauer  v.  Goldman,  72  N.  Y.  506,  28  Am.  Rep. 
171;  Thompson  v.  McCullough,  31  Mo.  224,  77  Am.  Dec.  644;  Merriam 
V.  Wolcott,  85  Mass.  (3  Allen)  258,  80  Am.  Dec.  69. 

Damages  for  breach  of  warranty,  see  Coolidge  v.  Brigham,  42  Mass. 
(1  Mete.)  547,  46  Mass.  (5  Mete.)  68;  Giflfert  v.  West,  33  Wis.  617.  What 
instruments  negotiable  by  delivery,  see  ante,  §§  123,  124.  What  is  a  quali- 
fied indorsement,  see  ante,  §  135.  Liability  of  indorser  "without  recourse," 
sec  ante,  §§  132,  133. 

64  Subdivision  2  of  same  sections  of  negotiable  instruments  laws  as  last 
above  cited. 

Meriden  Nat.  Bank  v.  Gallaudet,  120  N.  Y.  298,  24  N.  E.  994,  revers- 
ing 55  N.  Y.  Super.  Ct.  233;  Murray  v.  Judah,  6  Cow.  (N.  Y.)  484;  Mer- 
riam V.  Wolcott,  85  Mass.  (3  Allen)  258,  80  Am.  Dec.  69. 

65  Subdivision  3  of  same  sections  of  negotiable  instruments  laws  as  last 
above  cited. 

Glidden  v.  Chamberlin,  167  Mass.  486,  46  N.  E.  103,  57  Am.  St.  Rep. 
479;  Lobdell  v.  Baker,  44  Mass.  (3  Mete.)  469. 

66  Subdivision  4  of  same  sections  of  negotiable  instruments  laws  as  last 
above  cited. 

Otis  V.  Cullum,  92  U.  S.  447,  23  Law.  Ed.  496  (municipal  bonds). 


§  162  INDORSER'S  WARRANTIES.  203 

less.^^    "Where  the  negotiation  is  by  delivery,  the  warranty  extends 
only  to  the  immediate  transferee.^^ 

§  161.    Every  indorser  w^ho  indorses  without  qualification  war- 
rants to  all  subsequent  holders  in  due  course: 

1.  The  matters  and  things  mentioned  in  subdivisions  one, 

two  and  three,  of  the  next  preceding  section ; 

2.  That  the  instrument  is  at  the  time  of  his  indorsement 
valid  and  subsisting. 

§  162.  And,  in  addition,  he  engages  that  on  due  presentment  it 
shall  be  accepted  or  paid,  or  both,  as  the  case  may  be, 
according  to  its  tenor,  and  that  if  it  be  dishonored,  and 
the  necessary  proceedings  on  dishonor  be  duly  taken,  he 
will  pay  the  amount  thereof  to  the  holder,  or  to  any  sub- 
sequent indorser  who  may  be  compelled  to  pay  it. 

The  warranties  herein  treated  apply  to  "every  indorser  who 
indorses  without  qualification."^^  The  word  "every"  as  here  used 
is  a  term  of  inclusion,''*^  and  it  embraces  every  party  who,  by  pre- 
vious provisions,  is  classed  as  an  indorser,  unless  his  indorsement 

67  Same  subdivisions  and  sections  of  negotiable  instruments  laws  as  last 
above  cited.       ^ 

That  one  negotiating  without  delivery  does  not  warrant  the  solvency 
of  the  maker,  see  Milliken  v.  Chapman,  75  Me.  306,  49  Am.  Rep.  615; 
Burgess  v.  Chapin,  5  R.  I.  225.  But  see  Stewart  v.  Orvis,  47  How.  Pr. 
(N.  Y.)   518. 

Where  the  seller  of  a  check  knows  the  drawer  to  be  insolvent,  he 
cannot  recover  the  price  to  be  paid  for  the  check.  Browh  v.  Montgomery, 
20  N.  Y.  287,  75  Am.  Dec.  404. 

68  Same  subdivision  and  sections  of  negotiable  instruments  laws  as  last 
above  cited. 

69Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La.. 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl..  Or., 
Pa.,  Tenn.,  Utah",  Va.,  Wash.,  W.  Va.,  Wyo.  (§  66);  Ariz.  (§  3369);  111. 
(§  66);  Kan.  (§  73);  Md.  (§  85);  Mich.  (§  68);  Neb.  (§  66),  N.  Y.  (§  116); 
Olvr-  (?  3173k);  R.  I.  (§  74);  Wis.  (§  1677-6). 

First  Nat.  Bank,  77  Ohio  St.  311,  83  N.  E.  392,  14  L.  R. 
A.  (N.  S.)  842. 


204  LIABILITIES  AND  RIGHTS.  §  162 

has  been  qualified  by  appropriate  words.'^^  It  will  thus  be  seen 
that  one  who  indorses  a  negotiable  instrument  without  qualifica- 
tion is  liable  as  a  general  indorser,  though  it  had  been  indorsed 
to  him  restrictively,  i.  e.,  for  collection  or  deposit.  The  rule  is 
very  important,  especially  with  reference  to  checks  indorsed  for 
collection,  and  subsequently  indorsed  without  qualification  by 
the  bank  or  other  collecting  agent.  It  is  very  important,  also, 
because  it  changes  the  law,  the  rule  formerly  being  that  the  in- 
dorsement of  a  collecting  bank  does  not  imply  a  warranty  that 
a  prior  indorsement  is  genuine.'^^ 

Following  the  law  merchant  the  warranties  only  exist  in  favor 
of  "subsequent  holders  in  due  course, "'^^  and  hence  an  indorser 
does  not  warrant  to  the  drawee  the  genuineness  of  the  drawer's 
signature;''^  and  following  this  rule  it  has  been  held  that  one 
who  is  both  the  maker  and  holder  of  a  note  indorsed  in  blank 
cannot  sue  the  indorser  on  the  note.''^ 

An  indorser  who  indorses  without  qualification  warrants  to  all 
subsequent  holders  in  due  course  that  the  instrument  is  genuine 

7iRockfield  V.  First  Nat.  Bank,  11  Ohio  St.  311,  83  N.  E.  392,  14  L.  R. 
A.  (N.  S.)  842. 

72  United  States  v.  American  Exch.  Nat.  Bank,  70  Fed.  232.  The  rule 
heretofore  was  that  a  collecting  bank  indorsing  generally  was  not  liable 
to  the  paying  bank  in  case  the  check  had  been  raised.-  National  Park 
Bank  v.  Seaboard  Bank,  114  N.  Y.  28,  28,  20  N.  E.  632,  "l  Am.  St.  Rep. 
612.  See,  also,  La  Farge  v.  Kneeland,  7  Cow.  (N.  Y.)  456;  Mowatt  v. 
McLelan,  1  Wend.  (N.  Y.)  173;  Herrick  v.  Gallagher,  60  Barb.  (N.  Y.) 
566,  holding  that,  when  a  collecting  bank  acted  merely  as  agent,  it  could 
not  be  required  to  repay,  where  it  had  paid  the  amount  collected  to  its 
principal  without  notice. 

73Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or., 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va,.  Wyo.  (§  66);  Ariz.  (§  3369);  111. 
(§  66);  Kan.  (§  73);  Md.  (§  85);  Mich.  (§  68);  Neb.  (§  66);  N.  Y.  (§  116); 
Ohio  (§  3173  k);  R.  I.  (§  74);  Wis.  (§  1677-6\ 

Bruck  V.  Lambeck,  63  Misc.  117,  118  N.  Y.  Supp.  494. 

74  Farmers'  &  Merchants'  Bank  v.  Bank  of  Rutherford,  115  Tenn.  64, 
88  S.  W.  939,  112  Am.  St.  Rep.  817. 

75Abramowitz  v.  Abramowitz,  113  N.  Y.  Supp.  798.  If  an  accommo- 
dation maker  for  indorser's  benefit,  proper  remedy  is  an  action  for  money 
paid.     Id, 


§  162  INDORSER'S  WARRANTIES.  205 

and  in  all  respects  what  it  purports  to  be.'^^  This  includes  a  war- 
ranty against  fraud""  and  forgery,'^^  that  he  has  good  title  to  it,^^ 
that  all  prior  parties  had  capacity  to  contract,so  that  the  instru- 


76  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or., 
Pa.,  Tenn..  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  66);  Ariz.  (§  3369);  III. 
(§  66);  Kan.  (§  7Z);  Md.  (§  85);  Mich.  (§  68);  Neb.  (§  66);  N.  Y.  (§  116); 
Ohio  (§  3173  k);  R.  I.  (§  74);  Wis.  (§  1677-6). 

State  V.  Corning  State  Sav.  Bank,  139  Iowa,  338,  115  N.  W.  937;  Crosby 
V.  Wright,  70  Minn.  251,  73  N.  W.  162.  The  indorser  warrants  the  gen- 
uineness of  the  signature  of  the  maker.  Brown  v.  Ames,  59  Minn.  476, 
61  N.  W.  448;  Condon  v.  Pearce,  43  Md.  83;  First  Nat.  Bank  v.  North- 
western Nat.  Bank,  40  111.  App.  640;  Turnbull  v.  Bowyer,  40  N.  Y.  456, 
100  Am.  Dec.  523. 

77  That  the  maker's  signature  was  obtained  by  fraud  is  no  defense  to  an 
indorser.  Where  note  was  part  performance  of  a  written  contract  to 
which  indorser  was  not  a  party.  Elliott  v.  Brady,  192  N.  Y.  221,  85  N. 
E.  69,  127  Am.  St.  Rep.  898,  18  L.  R.  A.  (N.  S.)  600. 

78Packard  v.  Windholz,  88  App.  Div.  365,  84  N  Y.  Supp.  666,  afd.  180 
N.  Y.  549,  7Z  N.  E.  1129.  Accommodation  indorser  liable;  former  in- 
dorsement a  forgery.  Oriental  Bank  v.  Gallo,  112  App.  Div.  360,  98  N.  Y. 
Supp.  561.  Indorsement  proving  a  forgery  remote,  subsequent  indorsee 
need  not  let  suit  by  holder  against  him  go  to  judgment  before  paying; 
paying  before  judgment  is  not  voluntary  so  as  to  release  intervening  in- 
dorsers.  Id.  An  indorser  of  a  forged  paper  is  liable  to  a  bona  fide 
holder.  Birmingham  Nat.  Bank  v.  Bradley,  103  Ala.  109,  15  So.  440;  Len- 
non  V.  Grauer,  2  App.  Div.  513,  38  N.  Y.  Supp.  22.  See.  also,  National 
Bank  of  North  America  v.  Bangs,  106  Mass.  441,  8  Am.  Rep.  349;  Turn- 
bull  v.  Bowyer,  40  N.  Y.  456.  Liability  of  indorser  without  recourse,  see 
ante,  §§  132,  133. 

79  Same  sections  of  negotiable  instruments  laws  as  last  above  cited. 
State  V.  Corning  State  Sav.  Bank,  139  Iowa,  338,  115  N.  W.  937;  Fur- 

gerson  v.  Staples,  82  Me.  159,  19-Atl.  158,  17  Am.  St.  Rep.  470. 

80  Same  sections  of  negotiable  instruments  laws  as  last  above  cited. 
Leonard  v.  Draper,  187  Mass.  536,  7Z  N.  E.  644. 

Warranty  as  to  capacity  of  maker.  Dalrymple  v.  Hillenbrand,  62  N. 
Y.  5,  20  Am.  Rep.  438;  Archer  v.  Shea,  14  Hun  (N.  Y.)  493;  Kilgore  v. 
Bulk-ley,  14  Conn.  362. 

Warranty  as  to  capacity  of  prior  indorser.  Prescott  Bank  v.  Caverly, 
73  Mass.  (7  Gray)  217;  Ogden  v.  Blydenburgh,  1  Hilt.  (N.  Y.)  182.  Un- 
der the  negotiable  instruments  laws  the  indorsement  or  assignment  of 
a  negotiable  instrument  by  a  corporation  or  an  infant  passes  the  property 
therein,  notwithstanding  that  from  want  of  capacity  the  corporation  or 


206  LIABILITIES  AND   RIGHTS.  §  162 

ment  is,  at  the  time  of  his  indorsement,  valid  and  subsisting,^^  and 
hence  cannot  defend  on  ground  that  note  was  void  because  of  usury 
in  its  inception.s2  rp^^g  waranties  provided  by  this  section  applj'' 
oeIv  to  the  condition  of  the  instrument  when  it  left  the  indorser's 
hand  and  do  not  apply  to  subsequent  alterations.^^ 

In  addition  to  the  above  such  an  indorser  engages  that  on  due 
presentment  the  instrument  shall  be  accepted  and  paid,  or  both, 
as  the  case  may  be,  according  to  its  tenor,  and  that  if  it  be  dis- 
honored, and  the  necessary  proceedings  on  dishonor  be  duly  taken, 
he  will  pay  the  amount  thereof  to  the  holder,  or  to  any  subsequent 
indorser  who  may  be  compelled  to  pay  it,**  though  of  course  his 

infant  may  incur  no  liability  thereon  as  indorsee  or  otherwise.  Neg. 
Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Ida'ho,  Iowa,  Ky.,  La.,  Mass.,  Mo., 
Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  OkL,  Ore.,  Pa.,  Tenn., 
Utah,  Va.,  Wash.,  W.  Va,.  Wyo.  (§  22);  Ariz.  (§  3325);  111.  (§  22);  Kan. 
(§  29);  Md.  (§  41);  Mich.  (§  24);  Neb.  (§  22);  N.  Y.  (§  41);  Ohio  (§ 
.3171  v);  R.  L  (§  30);  Wis.  (§  1675-22). 

To  same  effect  see,  as  to  indorsement  or  transfer  by  infant,  Roach  v. 
Woodall,  91  Tenn.  206,  18  S.  W.  407,  30  Am.  St.  Rep.  883;  Semple  v. 
Morrison,  23  Ky.  (7  T.  B.  Mon.)  298;  and  as  to  indorsement  or  transfer 
by  copporation,  Brown  v.  Donnell,  49  Me.  421,  77  Am.  Dec.  266;  Clark 
V.  Farrington,  11  Wis.  321. 

81  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev;,'N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  OkL,  Or.,  Pa., 
Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  66)  ;  Ariz.  (§  3369)  ;  111.  (§  66)  ; 
Kan.  (§  73)  ;  Md.  (§  85)  ;  Mich.  (§  68)  ;  Neb.  (§  66)  ;  N.  Y.  (§  116)  ;  Ohio 
(§  3173  K)  ;  R.  L  (§  74)  ;  Wis.  (§  1677-6). 

Leonard  v.  Draper,  187  Mass.  536,  73  N.  E.  644.  Accommodation  in- 
lorser.  Packard  v.  Windholz,  88  App.  Div.  365,  84  N.  Y.  Supp.  666,  afd. 
!80  N.  Y.  549,  73  N.  E.  1129. 

82  Horowitz  V.  WoWowitz,  59  Misc.  520,  110  N.  Y.  Supp.  972. 

83  First  Nat.  Bank  v.  Gridley,  112  App.  Div.  398,  98  N.  Y.  Supp.  445. 
8*  Same  sections  of  negotiable  instruments  laws  as  last  above  cited. 
Ankeny  v.   Henry,   1   Idaho,  229,  where  the  court  used  this  language: 

"The  undertaking  of  an  indorser  is  conditional;  that  is,  his  promise  is 
that  he  will  pay,  provided  the  payment  shall  first  have  been  properly  de- 
man^d  of  the  maker,  and  due  notice  of  his  neglect  or  refusal  shall  have 
been  given."  State  v.  Corning  State  Sav.  Bank,  139  Iowa,  338,  115  N. 
W.  937.  The  indorser  contracts  to  pay  the  note  at  maturity  if  duly  pre- 
sented for  payment  to  the  maker,  and  the  indorser  is  thereafter  duly  no- 
tified of  such  presentment.  A.  B.  Farquhar  Co.  v.  Higham,  16  N.  D. 
106,  112  N.  W.  557.     See  post,  chapter  XII,  Preserrtment  for  Payment 


§  1G3  OF  CONSECUTIVE  INDORSEES.  207 

rights  in  this  matter  may  be  waived,  either  expressly  or  im- 
pliedly .^s  After  default  and  notice  the  indorser's  liability  is  still 
separate,  independent  and  distinct  from  that  of  the  maker,  and 
hence  a  payment  on  account  by  the  latter  will  not  stop  the  run- 
ning of  limitations  as  against  the  indorser.^^  The  possession  of  a 
promissory  note  by  an  indorser,  after  its  protest  for  nonpayment 
by  the  holder,  is  prima  facie  evidence  tliat  he  has  performed  his 
contract  of  indorsement  and  has  paid  to  the  holder  the  amount 
due  upon  the  note.^^ 


Consecutive  And  Joint  Indorsees. 

§  163.  As  respects  one  another,  indorsers  are  liable  prima  facie 
in  the  order  in  which  they  indorse;  but  evidence  is  ad- 
missible to  show  that  as  betv\^een  or  among  themselves 
the3^  have  agreed  otherv/ise.  Joint  payees  or  joint  in- 
dorsees who  in'Jorse  are  deemed  to  indorse  jointly  and 
severally. 

As  between  themselves,  indorsers  are  liable  prima  facie  in  the 
order  in  which  they  indorse  ;^^  but  parol  ^^  evidence  is  admissible 
to  show  that  as  between  or  among  themselves  they  have  agreed 

85  Toole  V.  Crafts,  193  Mass.  110,  78  N.  E.  775.  See  post,  chapter  XII,  § 
194. 

86  Mason  v.  Kilcourse,  71  N.  J.  Law,  472,  59  Atl.  21. 

87  Hill  V.  Buchanan,  71  N.  J.  Law,  301,  60  Atl.  952. 

88  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C.,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or., 
Pa..  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  68);  Ariz.  (§  3371);  111. 
(§  68);  Kan.  (§  75);  Md.  (§  87);  Mich.  (§  70);  Neb.  (§  68);  N.  Y.  (§  118); 
Ohio  (§  3173  m);  R.  I.  (§  76);  Wis.  (§  1677-8). 

Morgan  v.  Thompson,  72  N.  J.  Law,  244,  62  Atl.  410;  Coolidge  v.  Wig- 
gin,  62  Me.  568.     See,  also,  Williams  v.  Merchants'  Bank,  67  Tex.  606. 

89  Maker  of  a  bill  payable  to  himself  and  indorsed  by  him  is  an  in- 
dorser, and  as  between  him  and  subsequent  indorsers  parol  evidence  is 
authorized  to  determine  their  liability.  Haddock,  Blanchard  &  Co.  v 
Haddc-ck,  192  N.  Y.  499,  85  N.  E.  682,  afg.  118  App.  Div.  412,  103  N.  Y. 
Supp.  584;  Wilson  v.  Hendee,  74  N.  J.  Law,  640,  66  Atl.  413. 


208  LIABILITIES  AND  RIGHTS.  §  163 

otherwise.^"  This  section  is  not  inconsistent  with  that  heretofore 
considered  providing  for  the  liability  of  an  irregular  indorser,*^ 
for  as  we  have  seen  the  two  sections  should  be  read  together  and 
so  construed  the  latter  section  refers  to  the  liability  of  the  parties 
while  the  paper  is  with  the  public  as  a  negotiable  instrument ;  while 
the  one  now  being  considered  defines  the  rights  of  the  indorsers  as 
between  themselves  where  the  negotiable  character  if  the  instru- 
ment is  unimportant.^  Under  this  rule  it  may  be  shown  that  the 
indorsers  had  agreed  on  a  joint  liability,^^  either  as  cosureties^* 
or  otherwise,  or  that  each  should  contril)ute  equally.^^  Also,  the 
rights  and  liabilities  of  an  indorser  before  delivery  as  against  a 
maker  of  the  bill  are  to  be  determined  under  the  section  under 
consideration.^^ 

WSame  sections  of  negotiable  instruments  laws  as  last  above  cited. 
Morgan  v.  Thompson,  72  N.  J.  Law,  244,  62  Atl.  410;  Coolidge  v.  Wig- 
gin,  62  Me.  568.     See,  also,  Cauthen  v.  Central  Georgia  Bank,  69  Ga.  733. 

91  See  ante,  §  156. 

92  Haddock,  Blanchard  &  Co.  v.  Haddock,  118  App.  Div.  412,  103  N. 
Y.  Supp.  584;  Wilson  v.  Hendee,  74  N.  J.  Law,  640,  66  Atl.  413.  It  fol- 
lows that  an  irregular  indorser  of  drafts  who  indorses  them  in  order  to 
give  credit  to  the  acceptors  under  an  agreement  that  he  should  be  liable 
for  goods  furnished  the  acceptors  is  liable  to  the  maker  on  his  indorse- 
ment, when  the  acceptor  fails  to  pay.  Haddock,  Blanchard  &  Co.  v. 
Haddock,  118  App.  Div.  412,  103  N.  Y.  Supp.  584.  The  former  section 
(Neg.  Inst.  Laws  N.  Y.,  §  64)  was  never  intended  to  create  an  incontestable 
liability  against  irregular  indorsers.  Haddock,  Blanchard  &  Co.  v.  Had- 
dock, 192  N.  Y.  499,  85  N.  E.  682,  afg.  118  App.  Div.  412,  10,3  N.  Y.  Supp. 
584.  Nor  does  said  section  establish  a  rule  as  to  the  liability  of  an  irreg- 
ular indorser  conclusive  on  the  parties  to  the  instrument  as  between 
themselves,  where  the  facts  show  a  different  intention.  Id.  See  ante,  § 
156. 

93  Phillips  V.  Preston,  46  U.  S.  (5  How.)  278,  12  Law.  Ed.  396;  Williams 
V.  Smith,  48  Me.  135. 

94Clapp  V.  Rice,  79  Mass.  (13  Gray)  403,  74  Am.  Dec.  639;  Farwcll  v. 
Ensign,  66  Mich.  600,  33  N.  W.  734;  Easterly  v.  Barber,  66  N.  Y.  433; 
Love  V.  Wall,  8  N.  C.  (1  Hawks)  313. 

95  Ross  V.  Espy,  66  Pa.  481,  5  Am.  Rep.  394;  Kiel  v.  Choate,  92  Wis.  517, 
67  N.  W.  431. 

96  Haddock,  Blanchard  &  Co.  v.  Haddock,  192  N.  Y.  499,  85  N.  E.  682. 
afg.  118  App.  Div.  412,  103  N.  Y.  Supp.  584. 


§]65  INDORSEMENT  BY  AGENT.  200 

Joint  payees  or  indorsers. 

Joint  payees  or  indorsees  who  indorse  are  deemed  to  indorse 
jointly  and  severally .^^  Heretofore  they  have  been  held  to  a  joint 
liability  only.^^ 

Special  Indorsees. 

§  164.  A  person  indorsing  specially  an  instrument  payable  to 
bearer  is  liable  as  indorser  to  only  such  holders  as  make 
title  through  his  indorsement. 

While  a  special  indorsement  of  an  instrument  payable  to 
bearer  does  not  prevent  further  negotiation  by  delivery,^  still 
the  person  so  indorsing  is  liable  as  an  indorser  only  to  such 
holders  as  make  title  through  his  indorsement.^"^ 

Indorsement  by  Broker  or  Agent, 

§  165.  Where  a  broker  or  other  agent  negotiates  an  instrument 
without  indorsement,  he  incurs  all  the  liabilities  of  a 
transferror  by  delivery  or  by  a  qualified  indorsement, 
unless  he  discloses  the  name  of  his  principal  and  the  fact 
that  he  is  acting  only  as  agent. 

A  broker  or  other  agent  negotiating  an  instrument  without  in- 
dorsement incurs  all  the  liabilities  of  a  transferror  by  delivery  or 

97  Same  sections  of  negotiable  instruments  laws  as  last  above  cited. 

98  Lane  v.  Stacy,  90  Mass.  (8  Allen)  41,  holding  that  joint  payees  are 
joint  and  not  successive  indorsers,  and  that  it  makes  no  diflference 
whose  name  appears  first.  See,  also.  Woodward  v.  Severance.  89  Mass. 
(7  Allen)  340.  For  successive  indorsers  held  to  several  liability,  see 
Scott  V.  Doneghy,  56  Ky.  (17  B.  Mon.)  321;  Racket  v.  Linares,  16  La. 
Ann.  204;  Chalmers  v.  McMurdo,  5  Munf.  (Va.)  252,  7  Am.  Dec.  684; 
Slack  V.  Kirk,  67  Pa.  380,  5  Am.  Rep.  438. 

99  See  ante,  §  129. 

100  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or.' 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  40);  Ariz.  (§  3343):  111' 
(§  40);  Kan  (§  47);  Md.  (§  57);  Mich.  (§  42);  Neb.  (§  40);  N.  Y.  (§  70)- 
Ohio   (§  31721);   R.   I.   (§  48);  Wis.    (§   1676-10). 

Opp  — Sel — 14 


210  LIABILITIES  AND   RIGHTS.  §  IGli 

by  a  qualified  indorsement,  unless  he  discloses  the  name  of  liia 
principal,  and  the  fact  that  he  is  acting  as  agent.^°^ 


Rights  of  Holders. 

§  1C6.     The  holder  of  a  negotiable  instrument  is  prima  facie  the 
ov/ner  and  may  sue  thereon  in  his  own  name. 

The  holder  of  a  negotiable  instrument  is  prima  facie  the  owner 
thereof  and  may  sue  thereon  in  his  own  name,  and  this  though 
there  are  subsequent  indorsements  on  the  note,^°^  and  this  rule  is 
especially  true  of  the  payee.^^^  So,  also,  the  holder  of  a  negotiable 
instrument  for  the  purposes  of  collection  may,  under  this  section, 
sue  thereon  in  his  own  name,  and  payment  to  him  in  due  course 
discharges  the  instrument  and  relieves  the  makers  of  it.^°^^ 

101  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C.,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or., 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  69);  Ariz.  (§  3372);  111. 
(§  69);  Kan.  (§  76);  Md.  (§  88);  Mich.  (§  71);  Neb.  (§  69);  N.  Y.  (|  119); 
O'hio  (§  3173  n);  R.  I.  (§  11^;  Wis.   (§  1677-9). 

102  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or.,  Pa., 
Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  51)  ;  Ariz.  (§  3354)  ;  111.  (§  51)  ; 
Kan.  (§  58)  ;  Md.  (§  70)  ;  Mich.  (§  53)  ;  Neb.  (§  51)  ;  N.  Y.  (§  90)  ;  Ohio 
(§  3172w)  ;  R.  L  (§  59)  ;  Wis.  (§  1676-21). 

The  legal  title  to  a  note  which  is  indorsed  to  a  bank  for  collection 
and  after  protest  is  returned  to  such  indorser  is  in  the  latter,  who  has 
the  right  to  cancel  his  indorsement  to  the  bank  and  his  failure  to  ex- 
ercise this  right  is  immaterial,  as  his  possession  of  the  note  is  sufficient 
evidence  of  ownership  of  the  note.  New  Haven  Mfg.  Co.  v.  New  Haven 
Pulp  &  Board  Co.,  76  Conn.  126,  55  Atl.  604. 

103  Boyd  v.  Beebe,  64  W.  Va.  216,  61  S.  E.  304.  In  an  action  on  the 
iTote,  production  by  the  payee  is  suflTicient;  need  be  no  evidence  he  is 
holder.  Williams  v.  Holt,  170  Mass.  351,  49  N.  E.  654.  In  declaring  on 
note  in  an  action  for  debt  it  suffices,  as  to  title,  to  aver  that  the  de- 
fendant by  it  promised  to  pay  the  plaintiff  the  amount  named  in  the 
note,  no  indorsement  thereof  being  disclosed.  Duty  v.  Sprinkle,  64  W. 
Va.  39,  60  S.  E.  882. 

103a  Craig  v.  Palo  Alto  Stock  Farm  (Idaho)   102  Pac.  393. 


§167  HOLDERS  IN  DUE  COURSE.  211 

Bona  Fide  Holders. 

§  167.    A  holder  in  due  course  is  a  holder  who  has  taken  the  in- 
strument under  the  following  conditions: 

1.  That  it  is  complete  and  regular  upon  its  face; 

2.  That  he  became  the  holder  of  it  before  it  was  overdue, 

and  without  notice  that  it  had  been  previously  dis- 
honored, if  such  was  the  fact; 

Where  an  indorsement  bears  date  after  the  maturity 
of  the  instrument,  every  negotiation  is  deemed 
prima  facie  to  have  been  effected  before  the  in- 
strument v;as  overdue; 

Where  an  instrument  payable  on  demand  is  nego- 
tiated an  vnreasonable  length  of  time  after  its  issue, 
the  holder  is  not  deemed  a  holder  in  dv.e  course; 

For  the  purpose  of  determining  whether  the  trans- 
feree of  an  instrument  payable  to  order  and  in- 
dorsed after  transfer  is  a  holder  in  due  course,  the 
negotiation  takes  effect  as  of  the  time  when  the 
indorsement  is  actually  made; 

3.  That  he  took  it  in  good  faith; 

4.  That  he  took  it  for  value; 

Where  value  has  at  any  time  been  given  for  the  in- 
strument, the  holder  is  deemed  a  holder  for  value 
in  respect  to  all  parties  who  became  such  prior  to 
that  time; 

Every  indorsement  is  deemed  prima  facie  to  have 
been  based  on  a  valuable  consideration; 

Value  is  any  consideration  sufficient  to  support  a 
simple  contract.  An  antecedent  or  pre-existing 
debt  constitutes  value; 

Where  the  holder  has  a  lien  on  the  instrument,  aris- 
ing either  from  contract  or  by  implication  of  law, 
he  is  deemed  a  holder  for  value  to  the  extent  of  his 
lien; 


212  LIABILITIES  AND  RIGHTS.  §167 

5.  That  at  the  time  it  was  neg-otiated  to  him  he  had 

no  notice  of  any  infirmity  in  the  instrunient  or  de- 
fect in  the  title  of  the  person  negotiating  it ; 

Where  the  transferee  received  notice  of  any  infirm- 
ity in  the  instrument  or  defect  in  the  title  of  the 
person  negotiating  the  same  before  he  has  paid 
the  full  amount  agreed  to  be  paid  therefor,  he  will 
be  deemed  a  holder  in  due  course  only  to  the  ex- 
tent of  the  amount  theretofore  paid  by  him; 

The  title  of  a  person  who  negotiates  an  instrument  is 
defective  v/ithin  the  meaning  of  this  act  when  he 
obtained  the  instrument,  or  any  signature  there- 
to, by  fraud,  duress,  or  force  and  fear,  or  other 
unlawful  means,  or  for  an  illegal  consideration,  or 
when  he  negotiates  it  in  breach  of  faith,  or  under 
such  circumstances  as  amount  to  a  fraud; 

To  constitute  notice  of  an  infirmity  in  the  instrument 
or  defect  in  the  title  of  the  person  negotiating  the 
same,  the  person  to  whom  ii  is  negotiated  must 
have  had  actual  knowledge  of  the  infirmity  or  de- 
fect, or  knowledge  of  such  facts  that  his  action  in 
taking  the  instrument  amounted  to  bad  faith; 

6.  That  he  took  it  in  the  usual  or  due  course  of  business. 

Paper  must  be  complete  and  regular  on  face. 

In  considering  the  essential  differences  between  negotiable  and 
non-negotiable  paper,  we  saw  that  it  was  one  of  the  chief  charac- 
teristics of  a  negotiable  instrument  that  it  is  transferable  to  a 
holder  who  takes  free  from  all  prior  equities  affecting  the  paper.^°* 
In  order  that  a  holder  may  escape  such  equities,  and  become  what 

10*  This  is  also  expressly  provided  by  the  negotiable  instruments  laws. 

Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or., 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  57);  Ariz.  (§  3360);  111. 
(§  57);  Kan.  (§  64);  Md.  (§  76);  Mich.  (§  59);  Neb.  (§  57);  N.  Y.  (§  96): 
Ohio  (§  3173  b);  R.  I.  (§  65);  Wis.  (§  1676-27). 


§  167  BONA  FIDE  HOLDERS.  213 

is  termed  a  "bona  fide"  holder,  or  a  "holder  in  due  course,"  it 
is  essential,  first,  that  the  paper  he  takes  be  complete  and  regular 
on  its  face.^°^  Thus,  where  corporate  notes  were  signed  by  all 
the  necessary  corporate  officers  but  the  president,  one  taking 
them  as  collateral  had  actual  notice  of  the  iufiimity,  and  was  not 
a  bona  fide  liolder-^*^  The  same  rule  applies  to  the  purchaser  of 
a  check,  payable  to  order,  who  obtains  title  without  the  indorse- 
ment of  the  payee.  Such  a  purchaser  takes  "subject  to  all 
equities  and  defenses  existing  between  the  original  parties,  even 
though  he  has  paid  full  consideration,  without  notice  of  the  ex- 
istence of  such  equities  and  defenses. "  ^°'^  If  an  instrument 
discloses  usury,^*^  or  any   other  substantive  irregularity,^"^   the 

105  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or., 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  52);  Ariz.  (§  3355);  111. 
(§  52);  Kan.  (§  59);  Md.  (§  71);  Mich.  (§  54);  Neb.  (§  52);  N.  Y.  (§  91); 
Ohio  (§  3172  x);  R.  L  (§  60);  Wis.   (§  1676-22). 

Singer  Mfg.  Co.  v.  Summers,  143  N.  C.  102,  55  S.  E.  522.  Is  not 
bona  fide  holder  where  at  time  of  receiving  them  they  were  blank  as 
to  amount,  date  and  maturity.  Hunter  v.  Allen,  127  App.  Div.  572,  111 
N.  Y.  Supp.  820.  Request  to  delay  presentment  does  not  render  trans- 
feree not  bona  fide  holder.     Matlock  v.  Scheuerman  (Or.)  93  Pac.  823. 

Authority  to  fill  blanks,  see  ante,  §§  19,  20. 

106  Davis  Sewing  Mach.  Co.  v.  Best,  105  N.  Y.  59,  11  N.  E.  146. 

107  Goshen  Nat.  Bank  v.  Bingham,  118  N.  Y.  349,  23  N.  E.  180,  16  Am. 
St.  Rep.  765,  7  L.  R.  A.  595 

One  who  takes  title  to  a  prormissory  note,  payable  to  the  order  of 
a  person  therein  named,  merely  by  the  transfer  of  the  indebtedness  con- 
tained in  the  assignment  of  the  mortgage  securing  such  note,  is  not 
entitled  to  the  benefits  of  the  law  merchant  as  to  such  note,  but  holds 
it  subject  to  the  equities  that  would  affect  it  in  the  hands  of  his  as- 
signor.    Galusha  v.  Sherman,  105  Wis.  263,  81  N.  W.  495,  47  L.  R.  A.  417. 

lOSMetcalf  v.  Watkins,  1  Port.  (Ala.)  57;  Hamill  v.  Mason,  51  111. 
488.     But  see  Parker  v.  Plymell,  23  Kan.  402. 

i09Cronly  v.  Hall,  67  N.  C.  9,  12  Am.  Rep.  597;  Stein  v.  Rheinstrom, 
47  Minn.  476,  50  N.  W.  827.  But  see  Bank  of  Pittsburgh  v.  Neal,  63 
U.  S.  (22  How.)  96,  16  Law.  Ed.  248.  Note  made  payable  before  recited 
date  of  note,  see  Miller  v.  Crayton,  3  Thomp.  &  C.  360.  Instruments 
on  their  face  non-negotiable,  see  Muse  v.  Dautzler,  85  Ala.  359,  5  So.  178; 
Robertson  v.  Cooper,  1  Ind.  App.  78,  27  N.  E.  104;  First  Nat.  Bank  v. 
Bynum,  84  N.  C.  24,  Zl  Am.  Rep.  604.  See,  also,  Loomis  v.  Ruck,  56 
N.  Y.  462. 


214  LIABILITIES  AND   RIGHTS  §167 

holder  has  actual  notice  of  the  infirmity,  and  is  not  a  bona  fide 
holder. 

Must  take  before  maturity  without  notice  of  ajiy  previous  dis- 
honor. 

The  holder,  to  be  a  holder  in  due  course,  must  also  become 
holder  before  the  paper  was  overdue,  and  without  notice  that  it 
had  been  previously  dishonored,  if  such  was  the  case.^^'^ 

There  is  some  conflict  as  to  whether,  under  this  section,  the 
payee  is  a  holder  in  due  course.  It  has  been  held  that  the  words 
"holder  in  due  course"  should  be  construed  as  applicable  only 
to  one  who  takes  the  instrument  by  negotiation  from  another  who 
is  a  holder,iii  that  is,  one  to  whom,  after  completion  and  delivery, 
the  instrument  has  been  negotiated.i^^  This  changes  what  has 
heretofore  been  regarded  as  settled  law,^^^  an(j  h^g^  apparently, 

iioSubdivision  2  of  same  sections  of  negotiable  instruments  laws  as  last 
above  cited. 

Singer  Mfg.  Co.  v.  Summers,  143  N.  C.  102,  55  S.  E.  522;  Hodge 
V.  Wallace,  129  Wis.  84,  108  N.  W.  212,  116  Am.  St.  Rep.  938.  Indorsee 
after  maturity  takes  subject  to  defenses.  King  v.  Mecklenburg,  43  Colo. 
316,  95  Pac.  951.  See  First  Nat.  Bank  v.  Scott  County  Com'rs,  14  Minn. 
11,  100  Am.  Dec.  194;  Kernohan  v.  Durham,  48  Ohio  St.  1,  26  N.  E.  982, 
12  L.  R.  A.  41.  See,  also,  Hocking  Valley  Bank  v.  Barton,  72  Pa.  110. 
Overdue  interest  does  not  destroy  bona  fide  character  of  purchase  made 
before  maturity  of  the  principal.  Kelly  v.  Whitney,  45  Wis.  110,  30 
Am.  Rep.  697.  Indorsement  after  maturity  of  paper  transferred  before 
maturity,  see  Haskell  v.  Mitchell,  53  Me.  468,  89  Am.  Dec.  711;  Lan- 
caster Nat.  Bank  v.  Taylor,  100  Mass.  18,  97  Am.  Dec.  70. 

An  indorsee  of  several  notes,  some  past  due,  and  others  not,  is  a 
holder  in  due  course  of  those  not  due.  Boss  v.  Hewitt,  15  Wis.  285.  But 
see  Knott  v.  Tidyman,  86  Wis.  164,  56  N.  W.  632. 

iiiVander  Ploeg  v.  Van  Zuuk,  135  Iowa,  350,  112  N.  W.  807,  124  Am. 
St.   Rep.  275. 

ii2Vander  Ploeg  v.  Van  Zuuk,  135  Iowa,  350,  112  N.  W.  807,  124  Am. 
St.  Rep.  275.  Where  defendants  signed  a  note  in  blank  and  delivered 
it  to  a  third  party  who  filled  in  the  blanks,  making  it  payable  to  plain- 
tiff, and  delivered  it  to  him,  plaintiff  was  not  a  holder  in  due  course. 
Id.  But  see  Boston  Steel  &  Iron  Co.  v.  Steuer,  183  Mass.  140,  66  N.  E. 
646,  97  Am.  St.  Rep.  426. 

112  Chariton  Plow  Co.  v.  Davidson,  16  Neb.  374,  20  N.  W.  256;  John- 
ston Harvester  Co.  v.  MacLean,  57  Wis.  258,  15  N.  W.  177,  46  Am. 
Rep.  39. 


§  167  BONA  FIDE  HOLDERS.  215 

not  been  followed  in  all  states.^^*  The  rule  as  stated  is  in  accord 
with  the  English  view  of  the  similar  section  in  the  English  Bill 
of  Exchange  Act.^^^ 

Commercial  paper  is  not  overdue,  within  the  meaning  of  this 
rule,  if  transferred  on  the  day  of  maturity/^^  or,  where  grace  is 
allowed,  on  the  last  day  of  grace.^^^ 

Every  negotiation  is  deemed  prima  facie  to  have  been  effected 
before  the  instrument  was  overdue,  unless  the  indorsement  bears 
date  after  the  maturity  of  the  instrument.^^^ 

Where  an  instrument  payable  on  demand  is  negotiated  an  un- 
reasonable length  of  time  after  its  issue,  the  paper  is  overdue,  and 
the  holder  is  not  a  holder  in  due  course.^^^  What  is  a  reasonable 
time  depends  on  the  circumstances  of  the  case.^-'^     A  negotiation 

114  Where  payee  took  check  of  third  person  from  debtor  in  payment 
of  latter's  debt.  Boston  Steel  &  Iron  Co.  v.  Steuer,  183  Mass.  140,  66 
N.  E.  646,  97  Am.  St.  Rep.  426. 

115  Bill  of  Exchange  Act,  §  20.  Herdman  v.  Wheeler,  1  K.  B.  [1902] 
361.     See,  also,  Lewis  v.  Clay,  67  L.  J.  Q.  B.  224. 

iieWallach  v.  Bader,  7  N.  Y.  St.  Rep.  375. 

117  Johnson  v.  Glover,  121  111.  238,  12  N.  E.  257;  Continental  Nat.  Bank 
V.  Townsend,  87  N.  Y.  8;  Crosby  v.  Grant,  36  N.  H.  273.  But  see  Pine 
V.  Smith,  n  Mass.   (11   Gray)   38. 

118  N eg.  Inst.  Laws  Colo.,  Conn.,  D.  C.,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Ok).,  Or., 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  45);  Ariz.  (§  3348);  111. 
(§  45);  Kan.  (§  52);  Md.  (§  64);  Mich.  (§  47);  Neb.  (§  45);  N.  Y.  (§  75); 
Ohio   (§  3172  q);  R.  I.  (§  53);  Wis.   (§  1676-15). 

119  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Ok).,  Or., 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  53);  Ariz.  (§  3356);  111. 
(§  53);  Kan.  (§  60);  Md.  (§  72);  Mich.  (§  55);  Neb.  (§  53);  N.  Y.  (§  92); 
Ohio  (§  3172  x);  R.  L   (§  61);  Wis.   (§  1676-23). 

Poorman  v.  Mills,  39  Cal.  345,  2  Am.  Rep.  451;  Stockbridge  v.  Damon, 
22  Mass.   (5  Pick.)  223. 

120  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C.,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or., 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  193);  Ariz.  (§  3498);  111. 
(§  192);  Kan.  •(§  4);  Md.  (§  16);  Mich.  (§  2);  Neb.  (§  191);  N.  Y.  (§  4); 
Ohio  (§  3178  b);  R.  I.  (§  4);  Wis.  (§  1675). 

Next  day  sufficient.  Matlock  v.  Scheuerman  (Or.)  93  Pac.  823.  Ne- 
gotiation of  foreign  drafts  within  5  days  held  within  a  reasonable  time. 
Singer  Mfg.  Co.  v.  Summer,  143  N.    C.  102,  55  S.  E.  522. 


216  LIABILITIES  AND  RIGHTS.  §167 

of  demand  paper  within  seven  days,^^  or  twenty-three  days,^22  qj. 
a  month/"^3  or  even  two  years  ^^*  from  its  issuance,  has  been  held  to 
be  within  a  reasonable  time.  But  on  the  other  hand  a  negotiation 
three  or  four  months/^s  qj.  eight  months,^26  qj.  ^  year  ^^7  after  date, 
has  been  held  not  to  be  within  a  reasonable  time. 

In  order  to  determine  whether  the  transferee  of  an  instrument 
payable  to  order  and  indorsed  after  transfer  is  a  holder  in  due 
course,  the  negotiation  takes  effect  of  the  time  when  the  instru- 
ment is  actually  made.^^^ 

Must  take  in  good  faith. 

To  be  a  holder  in  due  course,  one  must  also  take  in  good  faith.'^^s 
The  words  "good  faith,"  in  this  connection,  refer  only  to  the 

121  Thurston   v.    McKown,   6   Mass.   428. 

122  Mitchell  V.  Catchings,  23  Fed.  710. 

123  Ranger  v.  Cory,  42  Mass.  (1  Mete.)  369. 

124  Tomlinson   Carriage  Co.  v.   Kinsella,  31   Conn.  268. 

125  Paine  v.  Central  Vt.  R.  Co.,  14  Fed.  269.  See,  also,  Herrick  v. 
Woolverton,  41  N.  Y.  581,  1  Am.  Rep.  461;  Stevens  v.  Brice,  38  Mass. 
(21   Pick.)    193. 

i26Ayer  v.  Hutchins,  4  Mass.  370,  3  Am.  Dec.  232;  American  Bank  v 
Jenness,  43  Mass.   (2  Mete.)   288. 

127  Hemmenway  v.   Stone,  7  Mass.  58,  5  Am.   Dec.  27. 

128  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or., 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  49);  Ariz.  (§  3353);  III. 
(§  49);  Kan.  (§  56);  Md.  (§  68);  Mich.  (§  51);  Neb.  (§  49);  N.  Y.  (§  79); 
Ohio  C§  3172  v);  R.  I.   (§  57);  Wis.   (§  1676-19). 

12^  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or., 
Pa.,  Tenn.  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  52);  Ariz.  (§  3355);  111. 
(§  52);  Kan.  (§  59);  Md.  (§  71);  Mich.  (§  54);  Neb.  (§  52);  N.  Y.  (§  91); 
Ohio  (§  3172 x);  R.  I.  (§  60);  Wis.  (§  1676-22). 

Bank  .of  Houston  v.  Day  (Mo.  App.)  122  S.  W.  756;  Ward  v. 
City  Trust  Co.,  192  N.  Y.  61,  84  N.  E.  585,  rvg.  117  App.  Div.  130, 
102  N.  Y.  Supp.  50;  Singer  Mfg.  Co.  v.  Summer,  143  N.  C.  102,  55 
S.  E.  522;  Weiss  v.  Rieser,  62  Misc.  292,  114  N.  Y.  Supp.  983.  Note  ob- 
tained by  duress.  Siegel  v.  Oehl,  110  N.  Y.  Supp.  916;  Canajoharie 
Nat.  Bank  v.  Diefendorf,  123  N.  Y.  191,  25  N.  E.  402,  10  L.  R.  A.  676; 
Noble  V.  Carey,  64  Hun,  635,  19  N.  Y.  Supp.  58;  Winkelman  v.  Choteau, 
78   111.    107;    Merchants'    Nat.   Bank  v.    Hanson,   33    Minn.   40,   21    N.   W. 


§  167  BONA  FIDE  HOLDERS.  217 

good  faith  of  the  indorsee  or  transferee.""  Bad  faith  in  taking 
commercial  paper  does  not  necessarily  involve  furtive  motives, 
but  it  exists  where  one  has  knowledge  of  facts  putting  him  on 
inquiry/31  and  by  inquiry  he  could  have  discovered  the  real 
situation,"^  Neither  the  purchase  of  a.  note  at  a  discount,"^  nor 
an  indorsement  without  recourse,"^  is  sufficient  to  put  the  pur- 
chaser on  inquiry.  Bad  faith  on  the  part  of  a  purchaser  may  be 
shown  by  evidence  of  gross  negligence,"^  and,  when  once  shown, 
subjects  him  to  all  defenses  available  between  prior  parties."^ 

Must  take  for  vaJue. 

To  be  a  holder  in  due  course  one  must  be  a  holder  for  value.^^ 
If  value  has  at  any  time  been  given  for  the  instrument,  the  holder 
is  deemed  a  holder  for  value  in  respect  to  all  parties  who  become 

849,  S3  Am.  Rep.  5.  A  transfer  in  consideration  of  other  negotiable 
paper  is  for  value.  Mickles  v.  Colvin,  4  Barb.  (N.  Y.)  304.  But,  contra, 
see  Harrington  v.  Johnson,  7  Colo.  App.  483,  44  Pac.  368;  Bird  v.  Har- 
ville,  33  Ga.  459  (due  bill). 

isoHaugan  v.  Sunwall,  60  Minn.  367,  62  N.  W.  398;  Helmer  v.  Krolick, 
36  Mich.  37. 

131  Ward  V.  City  Trust  Co.,  192  N.  Y.  61,  84  N.  E.  585,  rvg.  117  App. 
Div.  130,  102  N.  Y.  Supp.  SO;  Royal  Bank  v.  German-American  Ins.  Co., 
58  Misc.  563,  109  N.  Y.  Supp.  822.  Use  of  check  payable  to  corporation 
to  pay  individual  debt  of  officer  held  to  put  transferee  on  inquiry  as  to 
whether  such  use  was  authorized.  Ward  v.  City  Trust  Co.,  192  N.  Y. 
61,  84  N.  E.  585,  rvg.  117  App.  Div.  130,  102  N.  Y.  Supp.  SO. 

132  Ward  v.  City  Trust  Co.,  192  N.  Y.  61,  84  N.  E.  585,  rvg.  117  App. 
Div.  130,  102  N.  Y.  Supp.  SO. 

i33Lassas  v.  McCarty,  47  Or.  474,  84  Pac.  76. 

13*  Elgin  City  Banking  Co.  v.  Hall   (Tenn.)   108  S.  W.  1068. 

135  Drew  v.  Wheelihan,  75  Minn.  68,  77  N.  W.  558.  In  this  case,  the 
question  of  bona  fides  was  held  to  be  a  question  for  the  jury. 

136  Johnson  v.  Way,  27  Ohio  St.  374. 

137  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or., 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  52);  Ariz.  (§  3355):  111 
(§  52);  Kan.  (§  59);  Md.  (§  71);  Mich.  (§  54);  Neb.  (§  52);  N.  Y.  (§  91); 
Ohio  (§  3172  x);  R.  I.  (§  60);  Wis.  (§  1676-22). 

Siegel  V.  Oehl,  110  N.  Y.  Supp.  916;  Singer  Mfg.  Co.  v.  Summer,  143 
N.  C.  102,  55  S.  E.  522.  Where  check  unsupported  by  a  consideravion 
was  delivered  to  third  party  as  a  loan,  it  was  without  consideration  and 


218  LIABILITIES  AND  RIGHTS.  §167 

such  prior  to  that  time.^^^  Thus,  an  indorsee  for  value  before 
maturity  is  not  affected  by  a  failure  of  consideration  for  the  in- 
dorsement to  his  immediate  indorser  by  the  original  payee/^^  and, 
if  a  party  becomes  a  bona  fide  holder  for  value  of  a  bill  before  its 
acceptance,  it  is  not  essential  to  his  right  to  enforce  it  agaiiist  a 
subsequent  acceptor  that  an  additional  consideration  should  pro- 
ceed from  him  to  the  drawee.^**^ 

We  have  seen  that  the  original  consideration  for  a  negotiable 
instrument  is  prcsumed,^^^  and  that  a  consideration  for  an  in- 
dorsement is  also  presumed,^^^  and  it  follows,  as  of  course,  that  a 
holder  is  presumed  to  have  given  value  for  the  instrument,^*^  and 
this  presumption  is  not  repelled  merely  by  proof  that,  as  between 
the  immediate  parties,  the  paper  was  without  consideration.^^* 
The  rule  of  the  negotiable  instrument  laws,  that  an  antecedent  or 
pre-existing  debt  constitutes  value,  applies  as  well  to  the  transfer 
as  to  the  original  execution  of  a  negotiable  instrument.^*^     Under 

he  not  a  holder  in  due  course.  Rosenthal  v.  Parsont,  110  N.  Y.  Supp. 
223.  Surrendering  notes  and  claims  on  third  persons  and  paying  bal- 
ance in  cash  constitutes  value.  Bank  v.  Looney,  99  Tenn.  278,  42  S. 
W.  149,  63  Am.  St.  Rep.  830,  38  L.  R.  A.  837. 

138  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl,  Or., 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  26);  Ariz.  (§  3329);  111. 
(§  26);  Kan.  (§  33);  Md.  (§  45);  Mich.  (§  28);  Neb.  (§  26);  N.  Y.  (§  52); 
Ohio  (§  3171  x);  R.  I.   (§  34);  Wis.  (§  1675-52). 

A  payee  who,  on  receiving  a  note,  paid  the  maker's  indebtedness  to 
a  bank,  is  a  holder  for  value.  Hermann's  Ex'r  v.  Gregory  (Ky.)  115  S.  W. 
809. 

139  Bookheim  v.  Alexander,  64  Hun,  458,  19  N.  Y.  Supp.  776; 
i^OHeurtematte   v.   Morris,    101    N.  ■  Y.  63,   54  Am.    Rep.   657;    National 

Park  Bank  v.  Saitta,  127  App.  Div.  624,  111  N.  Y.  Supp.  927. 

141  See  ante,  §  59.  Riverside  Bank  v.  Woodhaven  Junction  Land  Co., 
34  App.  Div.  359,  54  N.  Y.  Supp.  266. 

142  See  ante,  §  125. 

143  Owens  v.  Snell,  29  Or.  483;  Page's  Adm'rs  v.  Bank  of  Alexandria, 
20  U.  S.  (7  Wheat.)  35,  5  Law.  Ed.  209;  Joveshof  v.  Rockney,  58  Misc.  559, 
109  N.  Y.  Supp.  818. 

144  See  Joveshof  v.  Rockney,  58  Misc.  559,  109  N.  Y.  Supp.  818. 

145  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or., 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  25);  Ariz.  (§  3328);  111. 


§  167  BONA  FIDE  HOLDERS.  219 

this  provision  the  indorsee  of  a  note  taken  as  eollnteral  for  a  pre- 
existing debt  takes  free  from  equities  between  the  original 
parties,^^^' and  a  person  taking  a  note  before  maturity  without 
notice,  "^ho  credits  the  amount  thereof  on  an  antecedent  debt  due 
to  him,  is  a  bona  fide  holder.^*'^  Under  the  Wisconsin  negotiable 
instruments  laAvs,  however,  "the  indorsement  or  delivery  of  ne- 
gotiable paper  as  collateral  security  for  a  pre-existing  debt,  with- 
out other  consideration,  and  not  in  pursuance  of  an  agreement  at 
the  time  of  delivery  by  the  maker,  does  not  constitute  value.^''^ 
One  taking  negotiable  paper  in  absolute  payment  of  a  pre-existing 
debt  is  a  purchaser  for  value,  though  he  did  not  pay  the  full  face 
value  of  the  instrument.^^^  In  amplification  of  the  rule  that  an 
antecedent  or  pre-existing  debt  constitutes  value^'^*'  is  the  rule 
that  a  holder  having  a  lien  on  the  instrument,  arising  either  from 
contract  or  by  implication  of  law,  is  a  holder  for  value  to  the 
extent  of  his  lien.^^^     While  this  rule  limits  the  recovery  by  the 

(§  25);  Kan.  (§  32);  Md.  (§  44);  Mich.  (§  27);  Neb.  (§  25);  N.  Y.  (§  51); 
Ohio  (§  3171  x);  R.  I.  (§  33);  Wis.  (§  1675-51). 

In  re  Hopper-Morgan  Co.,  154  Fed.  249;  Singer  Mfg.  Co.  v.  Summers, 
143  N.  C.  102,  55  S.  E.  522;  Hermann's  Ex'r  v.  Gregory  (Ky.)  115  S.  W. 
809;  Murchison  Nat.  Bank  v.  Dunn  Oil  Mills  Co.,  150  N.  C.  718, 
64  S.  E.  885 ;  Rosemond  v.  Graham,  54  Minn.  324,  40  Am.  St.  Rep.  336 ;  Gates 
V.  National  Bank,  100  U.  S.  239,  25  Law.  Ed.  580;  Swift  v.  Tyson,  41  U.  S. 
il^  Pet.)    1,  10  Law.   Ed.  166.     See  ante,  chapter  V. 

Z' 1*6  Brewster  v.  Shrader,  26  Misc.  480,  57  N.  Y.  Supp.  606.     The  court     ~7T~ 
in  this  case  takes  occasion  to  review  at  some  length  the  history  of  the  — ■*  '  — 
steps  leading  up  to  the  adoption  of  the  negotiable  instruments  laws..     In 
re  Hopper-Morgan   Co.,  154  Fed.  249;  Singer  Mfg.   Co.  v.  Summers,   143 
N.  C.  102,  55  S.  E.  522.     See,  also,  Whiteside  v.  First  Nat.  Bank  (Tenn. 
Ch.)  47  S.  W.  1108;  Murphy  v.  Gumaer,  12  Colo.  App.  472,  55  Pac.  951. 

147  Rosenwald  v.  Goldstein,  27  Misc.  827,  57  N.  Y.  Supp.  224. 

148  Negotiable   Inst.   Law,  §  1675-51. 

1*9  Heath  v.  Silverthorn  Lead  Mining  &  Smelting  Co.,  39  Wis.   146. 

150  See  ante,  §  61. 

151  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or., 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  27);  Ariz.  (§  3330);  111. 
(§  27);  Kan.  (§  34);  Md.  (§  46);  Mich.  (§  29);  Neb.  (§  27);  N.  Y.  (§  53); 
Ohio  (§  3171  z);  R.  L  (§  35);  Wis.  (§  1675-53). 

One  is  entitled  to  protection  as  a  bona  fide  holder  for  value  who  has 
taken    the    note   as   collateral    security  for   future   advances   subsequently 


220  LIABILITIES  AND  RIGHTS.  §167 

lienl' older  himself  to  the  amount  of  the  debt  secured/^^  [^  ^q^^  not 
limit  tlic  amount  recoverable  by  a  subsequent  bona  fide  holder; 
but  the  latter,  as  will  be  seen  later,  may  recover  the  face  value  of 
the  instrument,  though  he  paid  less.^^^ 

Value  may  also  be  any  consideration  which  will  support  a 
simple  contract.15*  A  transferee  taking  collateral  by  way  of 
sul^stitution  for  other  collateral  surrendered  becomes  a  holder  for 
value,i55  as  does  one  whose  right  is  based  on  an  exchange  of 
commercial  paper.i^e  But  a  holder  for  value  delivering  the  note 
to  his  agent  for  a  specific  purpose  does  not  ordinarily  constitute  a 
surrender  of  the  lawful  possession  of  the  note  as  a  holder  for 
value.i"  It  follows  that  a  bank  to  whom  is  forwarded  a  draft  for 
collection  only  does  not  thereby  become  a  holder  for  value,!^^  nor 
does  the  mere  existence  of  an  indebtedness  of  the  payee  to  the 
bank  constitute  it  holder  for  value,  the  draft  being  delivered  to 
the  payee  for  collection  only.i^a 

An  accommodation  party  is  liable  on  the  instrument  to  a  holder 
for  value,  though  such  holder,  at  the  time  of  taking  the  instru- 
ment, knew  him  to  be  only  an  accommodation  party .^^^     This  rule 

actually  made.     Black  v.  First  Nat.  Bank,  96  Md.  399,  54  Atl.  88.     See, 
also,  Brooks  v.  Sullivan,  129  N.  C.  190,  39  S.  E.  822. 

i52Messick  v.  Alderman,  77  Conn.  634,  60  Atl.  109;  Hatcher  v.  Indepen- 
dence Nat.  Bank,  79  Ga.  547,  5  S.  E.  Ill;  Handy  v.  Sibley,  46  Ohio  St. 
9,  17  N.  E.  329;  Winship  v.  Merchants'  Nat.  Bank,  42  Ark.  22.  The  rule 
applies  to  accommodation  paper.  Continental  Nat.  Bank  v.  Bell,  125 
N.  Y.  38,  22  N.  E.  1070;  Handy  v.  Sibley,  46  Ohio  St.  9. 

153  See  post,  §  172,  and  cases  cited. 

154  Matlock  V.  Scheuerman  (Or.)  93  Pac.  823. 
155VOSS  V.  Chamberlain,  139  Iowa,  569,  117  N.  W.  269. 
156  Matlock  V.  Scheuerman  (Or.)  93  Pac.  823. 
157VOSS  V.  Cham.berlain,  139  Iowa,  569,  117  N.  W.  269. 

158  Bank  of  America  v.  Waydell,  187  N.  Y.  115,  79  N.  E.  857,  afg.   103 
App.  Div.  25,  92  N.  Y.  Supp.  666. 

159  Bank  of  America  v.  Waydell,  187  N.  Y.  115,  79  N.  E.  857,  afg.   103 
App.  Div.  25,  92  N.  Y.  Supp.  666. 

160  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont..  Nev.,  N.  H.,  N.  J.,  N.  M„  N.  C,  N.  D.,  Okl.,  Or., 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  29);  Ariz.  (§  3332);  111. 
(§  29);  Kan.  (§  36);  Md.  (§  48);  Mich.  (§  31);  Neb.  (§  29);  N.  Y.  (§  55); 
Ohio  (§  3172  a);  R.  I.  (§  37);  Wis.  (§  1675-55). 


§  167  BONA  FIDE  HOLDERS.  221 

of  the  negotiable  instruments  laws  is  declaratory  of  the  law  mer- 
chants.^"^ 

The  transfer  of  negotiable  paper  to  a  bank  in  consideration  of 
credit  upon  its  books,  which  credit  is  not  absorbed  by  an  antece- 
dent indebtedness,  or  exhausted  by  subsequent  withdrawals  is  not 
a  purchase  in  the  ordinary  sense  of  the  term,^^-  but  the  rule  is 
otherwise  where  the  credit  to  the  seller  of  the  note  is  given  by  the 
purchaser,  not  on  its  own  books,  but  in  a  different,  solvent 
bank/"3  or  where  the  bank  holds  a  note  of  the  payee  due  on  the 
day  the  instrument  is  received  and  pays  the  same  by  application 
of  the  discount,^^*  or  where  it  assumes  a  legal  obligation  to  another 
on  the  faith  of  the  credit,^^^  or  allows  the  account  upon  which  it 
was  credited  to  become  overdrawn,  even  though  on  subsequent 
dates,  including  the  date  of  maturity  of  the  note,  the  account  had 
a  balance  exceeding  the  amount  of  the  note.^""    So,  too,  where  the 

Citizens'  Nat.  Bank  v.  Lillenthal,  40  App.  Div.  609,  57  N.  Y.  Supp.  567; 
White  V.  Savage,  48  Or.  604,  87  Pac.  1040;  Bank  v.  Looney,  99  Tenn.  278, 
42  S.  W.  149,  63  Am.  St.  Rep.  830,  38  L.  R.  A.  837. 

See  ante,  chapter  V,  §  65. 

161  Hodges  V.  Nash,  43  111.  App.  638;  Tourtelot  v.  Reed,  62  Minn.  384. 
64  N.  W.  928;  Maitland  v.  Citizens'  Nat.  Bank,  40  Md.  540,  17  Am.  Rep. 
620;  Holland  Trust  Co.  v.  Waddell,  75  Hun,  104,  26  N.  Y.  Supp.  980. 

i62McNight  V.  Parsons,  136  Iowa,  390,  113  N.  W.  858,  125  Am.  St. 
Rep.  265;  Albany  County  Bank  v.  People's  Ice  Co.,  92  App.  Div.  47,  86 
N.  Y.  Supp.  nZ;  Consolidation  Nat.  Bank  v.  Kirkland,  99  App.  Div.  121, 
91  N.  Y.  Supp.  353.  The  law  seems  to  be  settled  that,  when  a  bank  simply 
discounts  a  note  and  credits  the  amount  thereof  on  the  indorser's  ac- 
count without  paying  to  him  any  value  for  it,  it  is  not  enough  to  con- 
stitute such  bank  a  prima  facie  purchaser  for  value  of  the  note.  Elgir 
City  Banking  Co.  v.  Hall  (Tenn.)  108  S.  W.  1068,  citing  Selover,  p.  217 
Mere  creiliting  to  a  depositor's  account  on  the  books  of  a  bank,  of  the 
amount  of  a  check  drawn  on  another  bank,  where  the  depositor's  account 
continues  to  be  sufficient  to  pay  the  check  in  case  it  is  dishonored,  does 
not  constitute  the  bank  a  holder  in  due  course.  Citizens'  State  Bank  v. 
Cowles,  180  N.  Y.  340,  73  N.  E.  33,  105  Am.  St.  Rep.  765,  rvg.  89  App. 
Div.  281,  86  N.  Y.  Supp.  38.  True  of  a  mere  "conditional  credit."  Com- 
mercial Nat.  Bank  v.  Citizens'  State  Bank,  132  Iowa,  706,  109  N.  W.  198. 

i63Elgin  City  Banking  Co.    v.  Hall   (Tenn.)   108  S.  W.  1068. 

164  Wallabout  Bank  v.  Peyton,  123  App.  Div.  727,  108  N.  Y.  Supp.  42. 

165  Montrose  Sav.  Bank  v.  Claussen,  137  Iowa,  Ti,  114  N.  W.  547. 
i66Northfield  Nat.  Bank  v.  Arndt,  132  Wis.  383,  112  N.  W.  451;  DreiU 


222  LIABILITIES  AND  RIGHTS.  §1G7 

payee  of  a  check  on  another  bank  indorses  and  deposits  the  same 
with  his  bank,  receives  credit  of  the  amount  as  cash  in  his  general 
account,  to  be  checked  against,  with  nothing  to  qualify  the  effect 
of  such  acts,  the  bank  becomes  the  owner  of  the  check  and  not  a 
mere  agent  to  collect  the  same  for  the  payee.^^^  But  where  the 
avails  of  a  discount  are  applied  to  an  existing  indebtedness,  the 
bank  must  show  an  agreement  that  they  should  be  applied  in 
payment  and  extinguishment  thereof.^^^ 

Must  take  without  notice  of  infirmities  or  defects. 

A  holder  in  due  course  must  have  taken  without  notice,  at  the 
time  of  the  negotiation,  of  any  infirmity  in  the  instrument  or 
defect  in  the  title  of  the  person  negotiating  it.^^^  If,  however, 
the  transferee  receives  notice  of  any  such  infirmity  or  defect  be- 
fore he  has  paid  the  full  amount  agreed  to  be  paid  therefor,  he 
will  be  deemed  a  holder  in  due  course  only  to  the  extent  of  the 

ling  V.  First  Nat.  Bank,  43  Kan.  197,  23  Pac.  94,  19  Am.  St.  Rep.  126,  cit- 
ing Fox  V.  Bank  of  Kansas  City,  30  Kan.  441,  1  Pac.  789,  and  Mann  v. 
Nat.  Bank,  30  Kan.  412,  1  Pac.  579. 

16'  Aebi  V.  Bank  of  Evansville,  124  Wis.  73,  102  N.  W.  329,  109  Am.  St. 
Rep.  925,  68  L.  R.  A.  964. 

168  Consolidation  Nat.  Bank  v.  Kirkland,  99  App.  Div.  121,  91  N.  Y. 
Supp.  353. 

163  N eg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or., 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  52);  Ariz.  (§  3355);  111. 
(§  52);  Kan.  (§  59;  Md.  (§  71);  Mich.  (§  54);  Neb.  (§  52);  N.  Y.  (§  91); 
Ohio  (§  3172  x);  R.  I.  (§  60);  Wis.  (§  1676-22). 

First  Nat.  Bank  of  Wilkes-Barre  v.  Barnum,  160  Fed.  245;  Siegel  v. 
Oehl,  110  N.  Y.  Supp.  916.  Notice  acquired  after  transfer  does  not  affect 
bona  fides.  Hoge  v.  Lansing,  35  N.  Y.  136;  Richardson  v.  Monroe,  85 
Iowa,  359,  52  N.  W.  339,  39  Am.  St.  Rep.  301.  As  to  notice  acquired 
after  transfer,  but  before  consideration  is  paid,  see  Thompson  v.  Sioux 
Falls  Nat.  Bank,  150  U.  S.  231,  37  Law.  Ed.  1063.  On  rights  of  bona 
fide  purchaser  of  stolen  paper,  see  Whiteside  v.  First  Nat.  Bank  (Tenn. 
Ch.)  47  S.  W.  1108;  Kuhns  v.  Gettysburg  Nat.  Bank,  68  Pa.  445;  Dins- 
more  V.  Duncan,  57  N.  Y.  573,  13  Am.  Rep.  534;  Hall  v.  Wilson,  16  Barb. 
(N.  Y.)  548;  Franklin  Sav.  Inst.  v.  Heinsman,  1  Mo.  App.  336;  Wheeler 
V.  Guild,  37  Mass.  (20  Pick.)  545,  32  Am.  Dec.  231. 


§  167  BONA  FIDE  HOLDERS.  223 

amount  theretofore  paid  by  him.^"°     This  latter  section  is  merely 
declaratory  of  the  law  merchant.^'^^ 

When  title  of  person  negotiating  is  defective. 

The  title  of  the  person  negotiating  is  defective,  within  the 
meaning  of  the  act,  if  he  obtained  the  instrument  or  any  signature 
thereto  by  fraud,  duress,  or  force  and  fear,  or  other  unlawful 
means,  or  for  an  illegal  consideration,  or  when  he  negotiates  it 
in  breach  of  faith,  or  under  circumstances  amounting  to  fraud.^~2 
The  "Wisconsin  negotiable  instruments  law  adds  that  the  title  of 
such  person  is  absolutely  void  when  such  instrument  or  signature 
was  so  procured  from  a  person  who  did  not  know  the  character 
of  the  instrument,  and  could  not  have  obtained  such  knowledge 
by  the  use  of  ordinary  care.^'^    As  stated,  the  title  of  a  person  who 

170  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C.  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or., 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  54);  Ariz.  (§  3357);  111. 
(§  54);  Kan.  (§  61);'Md.  (§  73);  Mich.  (§  56);  Neb.  (§  54);  N.  Y.  (§  93); 
Ohio  (§  3172  z);  R.  I.  (§  62);  Wis.  (§  1676-24). 

Bank  of  Morehead  v.  Hernig,  220  Pa.  224,  69  Atl.  679;  Hodge  v.  Smith, 
130  Wis.  326,  110  N.  W.  192;  Hubbard  v.  Chapin,  84  Mass.  (2  'Mien) 
328;  Dresser  v.  Missouri  &  I.  R.  Const.  Co.,  93  U.  S.  92,  23  Law.  Ed.  815. 

171  Albany  County  Bank  v.  People's  Ice  Co.,  92  App.  Div.  47,  86  N.  Y. 
Supp.  773. 

172  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or., 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  55);  Ariz.  (§  3358);  111. 
(§  55);  Kan.  (§  62);  Md.  (§  74);  Mi(A.  (§  57);  Neb.  (§  55);  N.  Y.  (§  94); 
Ohio  (§  3173);  R.  I.  (§  63);  Wis.  (§  1676-25). 

Bank  of  Morehead  v.  Hernig,  220  Pa.  224,  69  Atl.  679. 

Fraud.  Packard  v.  Figliuolo,  114  N.  Y.  Supp.  753;  Hodge  v.  Smith, 
130  Wis.  326,  110  N.  W.  192;  Brook  v.  Teague,  52  Kan.  119,  34  Pac.  347; 
Heist  V.  Hart,  73  Pa.  286.  Usury.  Keene  v.  Behan,  40  Wash.  505,  82 
Pac.  884. 

173  Negotiable  Inst.  Law,  §  1676-25.  Signature  obtained  by  misrepre- 
sentation as  to  the  nature  of  the  instrument,  without  negligence  on  the 
part  of  the  signer,  does  not  create  a  valid  obligation,  even  in  the  hands 
of  a  bona  fide  holder.  Auten  v.  Gruner,  90  111.  300,  33  Am.  Rep.  54; 
Green  v.  Wilkie,  98  Iowa,  74,  66  N.  W.  1046,  60  Am.  St.  Rep.  184;  Kala- 
mazoo Nat.  Bank  v.  Clark,  52  Mo.  App.  593;  Griffiths  v.  Kellogg,  39 
Wis.  290,  20  Am.  Rep.  48;  Willnrd  v.  Nelson,  35  Neb.  651,  53  N.  W.  572, 


224  LIABILITIES  AND  RIGHTS.  §167 

negotiates  commercial  paper  is  defective  when  he  has  obtained 
any  signature  thereto  by  fraud,^'''*  and  if  the  party  so  defrauded 
be  relieved  from  liability  thereon,  then  such  fraud  makes  a  paper 
voidable  by  all  the  other  persons  who  signed  it,  though  they  did 
not  participate  in  and  were  ignorant  of  such  fraudulent  conduct 
at  the  time  they  signed  it.^^^  This  conclusion  is  based  on  the 
ground  that  when  several  persons  assume  such  an  obligation,  it 
is  material  and  important  that  all  who  join  as  makers  should 
share  equally  in  bearing  the  burden  of  its  payment,  and  if, 
through  the  fraud  of  the  person  holding  it,  such  equality  of  bur- 
den is  disturbed  and  increased  as  to  some  of  the  persons  signing 
it,  such  fraud  renders  the  title  defective  as  to  all  of  the  persons 
who  signed  it,^^^  and  it  would  seem  that  the  express  terms  of  the 
act  would  compel  the  result  here  reached.  This  being  the  ascer- 
tained meaning  of  the  section  proper,  we  proceed  to  consider  and 
determine  the  meaning  of  the  following  and  concluding  clause 
in  the  Wisconsin  act.  In  terms  it  expresses  the  rule  of  law  recog- 
nized in  those  decisions,  which,  prior  to  its  enactment,  held  that 
when  a  signature  to  a  negotiable  instrument  is  obtained  by 
falsely  and  fraudulently  misrepresenting  its  character,  and  the 
person  signing  it  could  not  have  obtained  knowledge  of  the  falsity 
and  fraud,  by  the  use  of  ordinary  care,  the  title  to  the  instrument 
is  absolutely  void  as  to  such  signer.^'^'^  The  words  of  the  statute, 
"the  title  of  such  person  is  absolutely  void  when  such  instrumenl. 
or  signature  was  so  procured  from  a  person,"  through  misrep- 
resenting its  character  and  from  one  who  was  not  guilty  of  a 
want  of  ordinary  care,  must  be  read  in  connection  with  the  pre- 
ceding clause,  declaring  a  person's  title  defective  "when  he  ob- 
tains the  instrument  or  any  signature  thereto"  in  the  prohibited 

37  Am.  St.  Rep.  455.  Aliter,  if  signer  was  negligent.  Boynton  v.  Mc- 
Daniel,  97  Ga.  400,  23  S.  E.  824;  Ward  v.  Johnson,  51  Minn.  480,  53  N. 
W.  766,  38  Am.  St.  Rep.  515;  Chapman  v.  Rose,  56  N.  Y.  137,  15  Am. 
Rep.  401. 

174  See  ante,  note   172. 

175  Hodge  V.  Smith,  130  Wis.  326,  110  N.  W.  192. 

176  Hodge  V.  Smith,  130  Wis.  326,  110  N.  W.   192;  Aukland  v.  Arnold, 
131  Wis.  64,  111  N.  W.  212. 

i77Aukland  v.  Arnold,  131   Wis.  64,  111   N.  W.  212. 


§  167  BONA  FIDE  HOLDERS.  225 

manner."^  These  phases,  in  their  connection,  embody  the  idea 
that,  if  the  instrument  or  any  signature  thereto  is  obtained  in  one 
of  the  prohibited  ways  covered  by  the  first  and  second  clauses, 
then  the  title  to  the  instrument  is,  respectively,  defective  or  abso- 
lutely void.1'9  Failure  or  vp-ant  of  consideration  does  not  consti- 
tute a  defective  title.^^" 

What  constitutes  notice  of  defects. 

To  constitute  notice  of  an  infirmity  in  the  instrument  or  defect 
in  the  title  of  the  person  negotiating  the  same,  the  person  to 
whom  it  was  negotiated  must  have  had  actual  knowledge  of  the 
infirmity  or  defect,  or  knowledge  of  such  facts  that  his  action  in 
taking  the  instrument  amounted  to  bad  faith.^^^  A  mere  sus- 
picion of  infirmity  will  not  constitute  notice.^^^    That  the  maker 

i78Aukland  v.  Arnold,  131  Wis.  64,  111  N.  W.  212. 

i79Hodge  V.  Smith,  130  Wis.  326,  110  N.  W.  192;  Aukland  v.  Arnold, 
131  Wis.  64,  111  N.  W.  212.  Where  note  was  signed  by  several  makers, 
and  th«e  signature  of  one  is  obtained  by  fraudulent  representations  as 
to  the  character  of  the  instrument,  and  he  could  not  have  obtained  knowl- 
edge of  its  character  by  the  use  of  ordinary  care,  the  note  was  void  as 
to  all  the  makers.     Aukland  v.  Arnold,  131  Wis.  64,  111  N.  W.  212. 

180  Holder  need  not  first  show  himself  a  holder  in  due  course,  the  bur- 
den of  showing  want  of  consideration  and  notice  thereof  by  the  in- 
dorsee being  upon  the  maker.  Cole  Banking  Co.  v.  Sinclair,  34  Utah, 
459,  98  Pac.  411. 

181  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or.. 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  56);  Ariz.  (§  3359);  111. 
(§  56);  Kan.  (§  63);  Md.  (§  75);  Mich.  (§  58);  Neb.  (§  56);  N.  Y.  (§  95); 
Ohio  (§  3173  a);  R.  I.  (§  64);  Wis.  (§  1676-26). 

Arnd  v.  Aylesworth  (Iowa)  123  N.  W.  1000.  Statute  does  not  relax  former 
Nebraska  rule.     Benton  v.  Sikyta  (Neb.)   122  N.  W.  61. 

See  Canajoharie  Nat.  Bank  v.  Diefendorf,  123  N.  Y.  191,  25  N.  E.  402, 
10  L.  R.  A.  676;  American  Exch.  Nat.  Bank  v.  New  York  Belting  & 
Packing  Co.,  148  N.  Y.  698,  43  N.  E.  168. 

182  Valley  Say.  Bank  v.  Mercer,  97  Md.  458;  Kelly  v.  Whitney,  45  Wis. 
110,  30  Am.  Rep.  697;  Jennings  v.  Todd,  118  Mo.  296,  24  S.  W.  148,  40 
Am.  St.  Rep.  373;  Second  Nat.  Bank  v.  Morgan,  165  Pa.  St.  199,  30  Atl. 
957,  44  Am.  St.  Rep.  652. 

Chemical  Nat.  Bank  v.  Kellogg,  183  N.  Y.  92,  75  N.  E.  1103,  111  Am. 
St.  Rep.  717,  2  L.  R.  A.  (N.  S.)  299;  Wedge  Mines  Co.  v.  Denver  Nat. 

Opp. — Sel. — 15 


226  LIABILITIES  AND  RIGHTS.  §167 

of  a  note  indorsed  in  blank  by  the  payee  is  the  bearer  and  dis- 
counts it  does  not  render  the  bank  a  holder  in  bad  faith,  it  having 
no  actual  knowledge.^^^  Bad  faith,  i.  c.,  fraud,  not  merely  sus- 
picious circumstances,  must  be  brought  home  to  a  holder  for 
value  whose  rights  accrued  before  maturity  in  order  to  defeat 
his  recovery  on  a  negotiable  note  upon  the  ground  of  fraud  in  its 
inception  or  between  the  parties  to  it.^^*  Gross  negligence  is 
evidence  from  which  bad  faith  may  be  inferred,  but  it  does  not  of 
itself  constitute  bad  faith  in  the  law.^^^  If  the  facts  shown  have 
any  fair  tendency  to  show  bad  faith,  the  question  is  one  of  fact.^^^ 


Bank,  19  Colo.  App.  182,  IZ  Pac.  873 ;  Kavanagh  v.  Bank  of  America,  239  111. 
404,  88  N.  E.  171 ;  Jefferson  Bank  of  St.  Louis  v.  Chapman-White-Lyons  Co. 
(Tenn.)  123  S.  W.  641. 

It  must  be  remembered  that  a  holder  in  good  faith  and  for  value  is 
not  chargeable  with  mere  inferences  which  might  be  drawn  from  the 
nature  of  the  transaction.  Johnson  v.  Buffalo  Center  State  Bank,  134 
Iowa,  731,  112  N.  W.  165.  That  certificate  of  deposit  bore  8  per  cent, 
interest  and  that  bank  transferred  it,  instead  of  presenting  it  for  payment, 
held  insufficient  to  impute  notice  of  defect  to  holder.  Id.  That  the  evi- 
dence only  tends  to  show  that  the  purchaser  was  put  on  inquiry  is  in- 
sufficient. Elgin  City  Banking  Co.  v.  Hall  (Tenn.)  108  S.  W.  1068.  But 
the  fact  that  the  maker  of  a  note  procures  its  discount  for  his  own  ben- 
efit is  notice  that  the  indorsement  was  merely  for  his  accommodation. 
National  Park  Bank  v.  German  Am.  Mut.  W.  &  S.  Co.,  116  N.  Y.  281, 
22  N.  E.  567,  5  L.  R.  A.  673;  Mechanics'  Bank  v.  Barnes,  86  Mich.  632, 
49  N.  W.  475;  National  Park  Bank  v.  Remsen,  43  Fed.  226.  The  fact  that 
the  payee  of  a  note,  made  by  a  corporation,  is  a  director  of  such  cor- 
poration, is  not  notice  to  a  transferee  of  any  infirmity  of  the  note,  nor 
is  it  sufficient  to  put  him  on  inquiry  concerning  the  circumstances  under 
which  the  note  was  issued.  The  rule  applicable  to  notes  made  by  offi- 
cers of  a  corporation  to  their  own  order  and  used  to  pay  their  individual 
obligations  has  no  application  to  notes  made  by  duly  authorized  officers 
payable  to  a  director.  Orr  v.  South  Amboy  Terra  Cotta  Co.,  113  App. 
Div.  103,  98  N.  Y.  Supp.  1026.  Indorsee  of  check  not  put  on  inquiry  by  nego- 
tiation before  its  date.    Albert  v.  Hoffman,  64  Misc.  87,  117  N.  Y.  Supp.  1043. 

183  Massachusetts  Nat.  Bank  v.  Snow,  187  Mass.   159,  72  N.  E.  959. 

184  Rice  v.  Barrington,  75  N.  J.  Law,  806,  70  Atl.  169. 
issKipp  V.  Smith,  137  Wis.  234,  118  N.  W.  848. 

186  McNight  v.  Parsons,  136  Iowa,  390,  113  N.  W.  858;  Matlock  v.  Scheu- 
erman  (Or.)  9Z  Pac.  823. 


§  167  BONA  FIDE  HOLDERS.  227 

Notice  to  an  a.G:ent  is  ordinarily  considered  notice  to  his  princi- 
pal,^^^  and  notice  to  a  partner  is  notice  to  the  firm.^^ 

Must  take  in  due  course  of  business. 

The  uniform  practice  of  merchants  in  transferring  credits,  rep- 
resented by  commercial  paper,  has  given  rise  to  certain  rules 
governing  the  method  of  transferring  such  paper,  which  method 
has  come  to  constitute  the  ordinary  or  usual  course  of  business, 
a  departure  from  which  is  equivalent  to  a  notice  of  equities,  and 
subjects  the  negotiable  instrument  to  defenses  in  the  hands  of  a 
holder  who  has  acquired  a  right  thereto  in  any  other  manner,^^' 
It  follows  that  in  addition  to  the  above  essentials  of  a  taking  in 
due  course,  it  is  usually  stated  that  to  be  a  bona  fide  holder  one 
must  take  in  the  usual  or  due  course  of  business.^^^    Commercial 

187  Merrill  v.  Packer,  80  Iowa,  542,  45  N.  W.  1076;  Knott  v.  Tidyman, 
86  Wis.  164,  56  N.  W.  632.  Contra,  see  First  Nat.  Bank  v.  Babbidge, 
160  Mass.  563,  36  N.  E.  462  (notice  to  president  of  bank).  See,  also, 
Union  Square  Bank  v.  Hellerson,  90  Hun,  262,  35  N.  Y.  Supp.  871  (no- 
tice to  attorney).  Knowledge  of  the  president  of  a  bank  is  not  notice 
to  the  bank  unless  he  receives  it  in  his  official  capacity.  Merchants' 
Nat.  Bank  v.  Clark,  139  N.  Y.  314,  34  N.  E.  910,  36  Am.  St.  Rep..  710. 
Notice  to  cashier  of  bank  notice  to  bank.  Hunter  v.  Allen,  127  App. 
Div.  572,  111  N.  Y.  Supp.  820. 

issCalvert  v.  Dimon,  19  Colo.  17,  34  Pac.  170;  Cunningham  v.  Wood- 
bridge,  76  Ga.  302;  King  v.  Nichols,  138  Mass.  18. 

is^Transferee  of  note  payable  to  order  and  transferred  without  in- 
dorsement takes  subject  to  all  equities  existing  in  favor  of  maker.  First 
Nat.  Bank  v.  McCullough,  50  Or.  508,  93  Pac.  366,  126  Am.  St.  Rep.  758, 
17  L.  R.  A.  (N.  S.)  1105. 

"If  one  purchases  an  accommodation  note  for  cash  and  sells  it  to  a 
bona  fide  purchaser  in  exchange  for  the  purchaser's  own  note,  the  pur- 
chaser may  be  found  to  be  a  holder  in  due  course."  Mehlinger  v.  Har- 
riman,  185  Mass.  245,  70  N.  E.  51.  General  surety  for  payee  and  guar- 
antor of  a  note  redeeming  the  note  from  a  transferee  in  pursuance  to 
his  general  suretyship  held  not  a  purchaser  in  usual  course  of  business. 
Rockefeller  v,  Ringle,  47  Kan.  515,  94  Pac.  810,  15  L.  R.  A.  (N.  S.)  111. 

iQ^'The  Wisconsin  negotiable  instruments  law  expressly  adds  this  requi- 
site (§  1676-22,  subd.  5).  Siegel  v.  Oehl,  110  N.  Y.  Supp.  916. 

As  to  what  constitutes  a  taking  in  due  course  of  business,  see  Roberts 
V.  Hall,  37  Conn.  205,  9  Am.  Rep.  308;  Stephens  v.  Olson,  62  Minn.  295, 
64   N.  W.   898,   following   Fredin   v.    Richards,   61    Minn.   490,   63    N.    W 


228  LIABILITIES  AND  RIGHTS.  §163 

paper  may  be  said  to  be  received  in  the  usual  course  of  business 
when  there  is  an  indorsement  and  delivery  for  value  under  such 
circumstances  that  a  business  man  of  ordinary  intelligence  and 
capacity  would  give  his  goods  and  credit  for  it  when  offered 
for  the  purpose  for  which  the  instrument  was  transferred.^^^ 
The  negotiable  instruments  laws,  however,  consider  one  a  bona 
fide  purchaser  when  his  purchase  has  the  elements  set  out  in 
the  preceding  four  sections,  as  such  elements,  taken  together,  con- 
stitute a  taking  in  due  course  of  business. 


Presumptions  and  Burden  of  Proof. 

§  168.  Every  holder  is  deemed  prima  facie  to  be  a  holder  in  due 
course ;  but  when  it  is  shown  that  the  title  of  any  person 
who  has  negotiated  the  instrument  was  defective,  the 
burden  is  on  the  holder  to  prove  that  he  or  some  person 
under  whom  he  claims  acquired  the  title  as  holder  in  due 
course. 

Exception. — But  the  last  mentioned  rule  does  not 
apply  in  favor  of  a  party  who  became  bound  on  the 
instrument  prior  to  the  acquisition  of  such  defective 
title. 

Every  holder  is  presumed  to  be  a  holder  in  due  course.^^^  When 
it  is  shown,  however,  that  the  title  of  any  person  who  has  nego- 

1031;  Railway  Equip.  &  Pub.  Co.  v.  Lincoln  Nat.  Bank,  82  Hun,  8,  31 
N.  Y.  Supp.  44;  Canajoharie  Nat.  Bank.  v.  Diefendorf,  123  N.  Y.  191, 
25  N.  E.  402,  10  L.  R.  A.  676;  Burnham  v.  Merchants'  Exch.  Bank,  92 
Wis.  277,  66  N.  W.  510. 

191  Matlock  V.  Scheuerman  (Or.)  93  Pac.  823. 

192  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or., 
Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  59);  Ariz.  (§  3362);  111. 
(§  59);  Kan.  (§  66);  Md.  (§  78);  Mdch.(§  61);  Neb.  (§  59);  N.  Y.  (§  98); 
Ohio  (§  3173  d);  R.  I.   (§  67);  Wis.  (§  1676-29). 

Benedict  v.  Kress,  97  App.  Div.  65,  89  N.  Y.  Supp.  607;  Wedge  Mines 
Co.  V.  Denver  Nat.  Bank,  19  Colo.  App.  182,  1Z  Pac.  873;  Evans  v.  Free- 
man, 142  N.  C.  61,  54  S.  E.  847;  Cox  v.  Cline,  139  Iowa,  128,  117  N.  W. 


§  168  BONA  FIDE  HOLDERS.  229 

tiated  the  instrument  was  defective,  the  burden  is  on  the  holder 
to  prove  that  he,  or  some  one  under  whom  he  claims,  acquired  the 
title  as  a  holder  in  due  course.^^^  The  purpose  of  the  law  in  ex- 
acting inquiry  under  such  circumstances  is  to  see  whether  the 
apparent  situation  is  the  actual  situation,  or,  in  other  words,  to 

48;  Kerr  v.  Anderson,  16  N.  D.  36,  111  N.  W.  614;  McCornick  v.  Swem 
(Utah)  102  Pac.  626;  Champion  Empire  Min.  Co.  v.  Bird,  7  Colo.  App.  523, 
44  Pac.  764;  Farmers'  Bank  v.  Brooke,  40  Md.  249;  Hall  v.  First  Nat.  Bank, 
133  111.  234,  24  N.  E.  546;  Estabrook  v.  Boyle,  83  Mass.  (1  Allen)  412;  Lang- 
ley  V.  Wadsworth,  99  N.  Y.  61,  1  N.  E.  106;  Tredwcll  v.  Blount,  86  N.  C.  33; 
Wayland  University  v.  Boornian,  56  Wis.  657,  14  N.  W.  819;  Joy  v.  Diefen- 
dorf,  130  N.  Y.  6,  28  N.  E.  602,  27  Am.  St.  Rep.  484,  holding  that  where  the 
maker  establishes  fraud,  plaintiff  must  prove  that  he  is  a  bona  fide  holder. 
Presumption  in  favor  of  bona  fide  holder,  that  instrument  was  delivered,  see 
ante,  §  29. 

193  Same  sections  of  negotiable  instruments  laws  as  last  above  cited. 

Cook  V.  American  Tubing  &  Webbing  Co.,  28  R.  I.  41,  65  Atl.  641,  9 
L.  R.  A.  (N.  S.)  193;  Parsons  v.  Utica  Cement  Mfg.  Co.,  80  Conn.  58,  66 
Atl.  1024;  Bank  of  Morehead  v.  Hernig,  220  Pa.  224,  69  Atl.  679;  Mitchell 
v.  Baldwin,  88  App.  Div.  265,  84  N.  Y.  Supp.  1043;  German-American 
Bank  v.  Cunningham,  97  App.  Div.  244,  89  N.  Y.  Supp.  836;  Consoli- 
dation Nat.  Bank  v.  Kirkland,  99  App.  Div.  121,  91  N.  Y.  Supp.  353;Pack- 
ard  v.  Figlinolo,  114  N.  Y.  Supp.  753;  J.  Regester's  Sons  Co.  v.  Reed, 
185  Mass.  226,  70  N.  E.  53;  Demelman  v.  Brazier,  198  Mass.  458,  84  N. 
E.  856;  Hodge  v.  Smith,  130  Wis.  326,  110  N.  W.  192;  Kerr  v.  Anderson, 
16  N.  D.  36,  111  N.  W.  614;  McNight  v.  Parsons,  136  Iowa,  390,  113 
N.  W.  858,  125  Am.  St.  Rep.  265;  City  Deposit  Bank  v.  Green,  138  Iowa, 
156,  115  N.  W.  893;  Cox  v.  Cline,  139  Iowa,  128,  117  N.  W.  48;  City  Nat. 
Bank  v.  Jordan,  139  Iowa,  499,  117  N.  W.  758;  American  Nat.  Bank  v. 
Fountain,  148  N.  C.  590,  62  S.  E.  738;  Elgin  City  Banking  Co.  v.  Hall 
(Tenn.)  108  S.  W.  1068;  Singer  Mfg.  Co.  v.  Summer,  143  N.  C.  102,  55  S.  E. 
522;  Chambers  v.  Falkner,  65  Ala.  448;  Schulthers  v.  Sellers,  223  Pa.  513,  72 
Atl.  887;  Beck  v.  Mailer,  131  App.  Div.  243,  115  N.  Y.  Supp.  596;  Iowa  Nat. 
Bank  v.  Carter  (Iowa)  123  N.  W.  237;  Arnd  v.  Aylesworth  (Iowa)  123  N. 
W.  lOOO;  Shirk  v.  Mitchell,  137  Ind.  185,  36  N.  E.  850.  The  last  case  cited 
boJds  that  where  the  defense  pleaded  is  a  failure  of  consideration,  or  any  other 
matter  arising  after  the  execution  of  the  note,  the  transaction  out  of  which  the 
note  arose  being  fair  and  lawful,  the  defendant  has  the  onus  of  the  issue  to 
establish  that  the  holder  of  the  note  took  it  with  notice  of  the  defense.  Illegality 
of  consideration  being  shown  the  burden  is  on  the  holder  to  show  his 
bona  fide  character.  Matlock  v.  Scheuerman  (Or.)  93  Pac.  823.  Usury. 
Keene  v.  Behan,  40  Wash.  505,  82  Pac.  884.  Instruction  that  burden  is 
on  the  holder  to  show  "that  some  person  under  whom  he  claims  acquired 


230  LIABILITIES  AND  RIGHTS.  §  168 

learn  whether  facts  exist  to  rebut  the  presumption.^^*  The  object 
is  not  to  discover  negative  facts,  or  such  as  would  not  arouse  sus- 
picion, but  positive  facts  which  would  allay  the  suspicion  already- 
aroused.^^^  The  law,  however,  goes  further  than  this  in  order  to 
promote  the  transfer  of  commercial  paper,  for  it  is  settled  that 
if  no  inquiry  is  in  fact  made  to  dispel  the  presumption,  but  reason- 
able inquiry  would  have  led  to  the  discovery  of  facts  which  would 
have  dispelled  it,  the  purchaser  of  the  paper  is  entitled  to  the 
benefit  thereof  the  same  as  if  he  had  learned  them  by  proper  in- 
vestigation.^^^  This  benefit,  however,  carries  with  it  the  burden 
of  responsibility  for  such  unfavorable  facts  as  reasonable  inquiry 
would  have  discovered  in  relation  to  the  defect  that  made  inquiry 
necessary.i^^  The  rule  stated  does  not  apply  in  favor  of  a  party 
who  became  bound  on  the  instrument  prior  to  the  acquisition  of 
such  defective  title.^^^    The  corresponding  provision  of  the  Eng- 

title  in  good  faith"  is  (.rroneous.  Hawkins  v.  Young,  137  Iowa,  281,  114 
N.  W.  1041.  Proof  that  a  full  consideration  was  paid  for  the  paper 
prima  facia  establishes  that  it  was  taken  in  due  course.  Hodge  v.  Smith, 
130  Wis.,  326,  110  N.  W.  192.  But  where  the  evidence  merely  discloses 
a  placing  of  the  consideration  to  the  credit  of  the  seller  on  the  books 
of  the  purchaser,  the  burden  is  on  the  latter  to  show  that  the  debt  was  in 
fact  paid.  Id.  Statute  is  declaratory  of  common  law.  Parsons  v.  Utica 
Cement  Co.  (Conn.)  73  Atl.  785.  Fraud  in  procurement  of  note.  Irelan-d  v. 
Scharpenberg  (Wash.)   103  Pac.  801. 

i9*Wajrd  V.  City  Trust  Co.,  192  N.  Y.  61,  84  N.  E.  585,  rvg.  117  App.  Div. 
130,  102  N.  Y.  Supp.  50.  This  involves  something  more  than  the  mere  pre- 
sumption arising  from  an  indorsement  regular  in  form.  O'Connor  v.  Klei- 
man  (Iowa)  121  N.  W.  1088. 

i95Wajrd  V.  City  Trust  Co.,  192  N.  Y.  61,  84  N.  E.  585,  rvg.  117  App.  Div. 
130,  102  N.  Y.  Supp.  50. 

i^eWard  v.  City  Trust  Co.,  192  N.  Y.  61,  84  N.  E.  585,  rvg.  117  App.  Div. 
130,  102  N.  Y.  Supp.  50. 

19' Ward  v;-'City  Trust  Co.,  192  N.  Y.  61,  84  N.  E.  585,  rvg.  117  App.  Div. 
130,  102  N.  Y.  Supp.  50. 

i98Same   sections   of  negotiable   instruments   laws   as   last   above    cited. 

Voss  v.  Chamberlain,  139  Iowa,  569,  117  N.  W.  269.  The  result  of  this  is 
that  the  defendant  cannot  overcome  the  presumption  that  the  holder  is  one  in 
due  course  by  showing  such  a  subsequent  defect ;  but  the  burden  still  remains 


§168  BONA  FIDE  HOLDERS.  231 

lish  Bills  of  Ehxchange  Act  of  1882  ^^^  is:  "Every  holder  of  a  bill 
is  prima  facie  deemed  to  be  a  holder  in  due  course ;  but  if,  in  an 
action  on  a  bill,  it  is  admitted  or  proved  that  the  acceptance, 
issue,  or  subsequent  negotiation  of  the  bill  is  affected  with  fraud, 
duress,  or  force  and  fear,  or  illegality,  the  burden  of  proof  is 
shifted,  unless  and  until  the  holder  proves  that,  subsequent  to 
the  alleged  fraud  or  illegality,  value  has  in  good  faith  been  given 
for  the  bill."  This  provision  has  been  construed  to  mean  that, 
when  fraud  is  proved,  the  burden  is  on  the  holder  to  prove  both 
a  valuable  consideration  and  a  taking  in  good  faith  without  notice 
of  the  fraud.200 

In  a  suit  by  a  subsequent  holder,  the  proper  method  of  pro- 
cedure is  for  the  plaintiff  to  produce  the  note,  prove  the  indorse- 
ments and  the  making  of  the  note,  and  rest,  thereby  establishing 
a  prima  facie  case  and  for  the  time  being  his  own  title  and  right 
to  recover,  and  the  defendant's  liability .^"^^  The  defendant  should 
then  be  permitted  to  prove  his  defense ;  ^^  and  it  is  then  necessary 
for  the  plaintiff  to  prove  that  he  is  a  bona  fide  holder  of  the  note 
for  value  before  maturity .^^^ 


on  him  to  show  that  the  holder  is  not  a  holder  in  due  course.  Id.  Fraud 
where  note  was  negotiated  in  violation  of  agreement  under  which  it  was 
given.  German  American  Bank  v.  Cunningham,  97  App.  Div.  244,  89  N.  Y. 
Supp.  836. 

199  45  &  46  Vict.  c.  61,  §  30,  subd.  2. 

200Tatam  v.  Haslar,  23  Q.  B.  Div.  345. 

20iSiegel  v.  Oehl,  110  N.  Y.  Supp.  916.  While,  as  stated,  every  holder 
is  deemed  prima  facie  a  holder  in  due  course,  still  the  uniform  practice 
in  suits  by  the  indorsee  against  the  maker  is  to  aver  that  the  plaintiff 
took  the  note  before  maturity  and  is  a  bona  fide  holder  for  value.  Failing 
so  to  do,  an  answer  averring  that  the  note  was  taken  after  notice  of  the 
payee's  defective  title,  and  that  little  or  no  consideration  passed,  is  suf- 
ficient to  put  the  plaintiflf  on  proof  of  the  bona  fides  of  the  transaction. 
Bank  of  Moorehead  v.  Hernig,  220  Pa.  224,  69  Atl.  679. 

202Duress.  Siegel  v.  Oehl,  110  N.  Y.  Supp.  916. 

203Siegel  V.  Oehl,  110  N.  Y.  Supp.  916. 


232  LIABILITIES  AND  RIGHTS.  §  169 

Defenses  Available  Against  Holder  in  Due  Course. 

§  169.  A  holder  in  due  course  holds  the  instrument  free  from  any 
defect  of  title  of  prior  parties,  and  free  from  defenses 
available  to  prior  parties  among  themselves. 

The  rule  that  a  holder  in  due  course  takes  free  from  all  equities 
existing  between  prior  parties  has  already  been  considered,  gen- 
erally, in  treating  of  the  essential  differences  between  negotiable 
and  non-negotiable  paper,  and  is  of  such  uniform  application  that 
it  hardly  requires  the  citation  of  any  authorities  to  sustain  it.^"* 
This  rule  is  essentially  one  of  public  policy .^^^  While,  except  as 
is  expressly  provided  in  the  act,  an  innocent  holder  may  enforce 
payment  for  the  full  amount  free  from  defenses  available  be-" 
tween  the  original  parties,^^^  still  it  is  advisable  at  this  point  to  ex- 
amine more  particularly  into  the  scope  of  the  term  "equities,"  and 
to  discover  what  legal  defenses  may  be  interposed  against  a  holder 
in  due  course. 

It  is  clear  that  defects  appearing  on  the  face  of  the  paper  at  the 
time  of  its  transfer  to  the  holder  are  not  "equities"  which  he  can 
escape  ■,'^^'^  nor  are  matters  which,  though  not  apparent  on  the 
face  of  the  paper,  render  the  contract  void  ab  initio,  such  as  ille- 
gality of  consideration  in  cases  where,  by  statute,  the  illegality 

204McFarland  v.  State  Bank  of  Chase,  7  Kan.  App.  722,  52  Pac.  110; 
Knight  V.  Tinney,  59  Neb.  274,  80  N.  W.  912;  Pettee  v.  Prout,  69 
Mass.  (3  Gray)  502,  63  Am.  Dec.  778;  Bostwick  v.  Dodge,  1  Doug.  413, 
41  Am.  Dec.  584;  Chase  Nat.  Bank  v.  Faurot,  149  N.  Y.  532,  44  N.  E.  164, 
35  L.  R.  A.  605;  Genesee  County  Sav.  Bank  v.  Kindt,  7  Wyo.  321,  51 
Pac.  878;  Little  v.  Dunlap,  44  N.  C.  (Busb.  Law)  40. 

205Chemical  Nat.  Bank  v.  Kellogg,  183  N.  Y.  92,  75  N.  E.  1103,  111  Am. 
St.  Rep.  717,  2  L.  R.  A.  (N.  S.)  299. 

206May  enforce  payment  of  lightning  rod  note  though  it  did  not  con- 
tain statement  of  such  fact,  as  required  by  Laws  1903,  p.  723,  c.  438.  Arnd 
V.  Sjoblom,  131  Wis.  642,  111  N.  W.  666.  Insurance  premium  note  given  for 
Jess  than  full  sum.    Gray  v.  Boyle  (Wash.)  104  Pac.  828. 

207  See  ante,  §  167. 


§  169  BONA  FIDE  HOLDERS.  233 

renders  the  contract  void,-°^  incapacity  of  prior  parties,^"^  and 
want  of  authority  in  the  officers  of  a  public  corporation  to  execute 
negotiable  instruments.^^"  Ordinarily,  however,  matters  not  ap- 
parent on  the  face  of  the  paper,  such  as  unindorsed  payments,^!! 
set-offs    and    counterclaims,^!^    mistake,-!^    fraud,    ^*    duress,    ^^^ 

208Aurora  v.  West,  22  Ind.  88,  85  Am.  Dec.  413;  Bayley  v.  Taber,  S 
Mass.  286,  4  Am.  Dec.  57;  Glen  v.  Farmers'  Bank,  70  N.  C.  191;  Union 
Nat.  Bank  v.  Brown,  101  Ky.  354,  19  Ky.  Law  Rep.  540,  41  S.  W.  273; 
International  Bank  v.  Vankirk,  39  III.  App.  23;  Snoddy  v.  American 
Nat.  Bank,  88  Tenn.  573,  13  S.  W.  127,  17  Am.  St.  Rep.  918,  7  L.  R.  A. 
705;  Swinney  v.  Edwards,  8  Wyo.  54,  55  Pac.  306,  80  Am.  St.  Rep.  916. 
Stallion  note.  Quiggle  v.  Herman,  131  Wis.  379,  111  N.  W.  479.  Statute 
declaring  gambling  notes  void  unenforcible  in  hands  of  bona  fide  hold- 
ers. Alexander  &  Co.  v.  Hazelrigg  123  Ky.,  677,  29  Ky.  Law  Rep.  1212, 
97  S.  W.  353. 

Rule  is  otherwise  where  illegality  results  from  common  law.  Note 
based  on  gambling  consideration  good  in  hands  of  bona  fide  holder. 
Wirt  V.  Stubblefield,  17  App.  D.  C.  283. 

209Anglo- California  Bank  v.  Ames,  27  Fed.  727;  Voreis  v.  Nussbaum, 
131  Ind.  267,  31  N.  E.  70,  16  L.  R.  A.  45;  Johnson  v.  Sutherland,  39 
Mich.  579;  Baker  v.  Gregory,  28  Ala.  544,  65  Am.  Dec.  366;  Miller  v. 
Finley,  26  Mich.  249,   12  Am.   Rep.   306. 

Title  passes  under  indorsement  or  assignment  by  corporation  or  in- 
fant notwithstanding  want  of  capacity.     See  supra,  note  80. 

2iOEastman  v.  District  Tp.  of  Lyon,  40  Iowa,  438;  Halstead  v.  New 
York,  5  Barb.  (N.  Y.)  218;  School  Directors  v.  Fogleman,  76  111.  190. 

211  Bank  of  University  v.  Tuck,  96  Ga.  456;  Biggerstaff  v.  Marston, 
161  Mass.  101,  36  N.  E.  785;  Harpending  v.  Gray,  It  Hun,  351,  27  N.  Y. 
Supp.  762.     See,  also,  Swope  v.  Ross,  40  Pa.  186,  80  Am.  Dec.  567. 

2i^Way  V.  Lamb,  15  Iowa,  79;  United  States  Nat.  Bank  v.  McNair, 
116  N.  C.  550,  21  S.  E.  389;  Carothers  v.  Richards,  17  Ky.  Law  Rep.  42, 
30  S.  W.  211;  McGrath  v.  Pitkin,  26  Misc.  862,  56  N.  Y.  Supp.  398;  Rob- 
inson V.  Lyman,  10  Conn.  30,  25  Am.  Dec.  52. 

2i3Steadwell  v.  Morris,  61  Ga.  91;  Huston  v.  Young,  33  Me.  85. 

214  Alabama  Nat.  Bank  v.  Halsey,  109  Ala.  196,  19  So.  522 ;  Holeman  v.  Hob- 
son,  27  Tenn.  (8  Humph.)  127;  Cristy  v.  Campau,  107  Mich.  172,  65  N.  W.  12 
(false  representations)  ;  Grant  v.  Walsh,  145  N.  Y.  302,  40  N.  E.  209,  45  Am. 
St.  Rep.  626;  Ormsbee  v.  Howe,  54  Vt.  182,  41  Am.  Rep.  841;  Holcomb 
v.  Wyckoff,  35- N.  J.  Law,  35,  10  Am.  Rep.  219.  So  held  where  payee  in- 
duced issuance  of  draft  by  impersonating  another  person  of  the  same 
name.     Jamieson  &  McFarland  v.  Herin,  43  Wash.  153,  86  Pac.  165. 

2i5Morrill  v.  Nightingale,  93  Cal.  452,  28  Pac.  1068,  27  Am.  St.  Rep.  207; 
Clark  v.  Pease,  41  N.  H.  414;  Farmers'    Bank  of  Grand  Rapids  v.  Butler, 


234  LIABILITIES  AND  RIGHTS.  §  169 

usury,2i8  and  want  of  failure  of  consideration,2i7  are  "equities" 
which  cannot  avail  against  a  header  in  due  course.  The  fact  that 
there  were  defects  or  omissions  in  the  execution  of  a  negotiable 
instrument,  which  are  not  apparent  on  its  face,  is  not  available 
against  a  holder  in  due  course.  Thus,  a  collateral  agreement  in- 
tended to  be  incorporated,  but  not  incorporated,  in  the  instru- 
ment, is  not  a  defense  f'^^  nor  can  a  mistake  in  date  be  shown 
against  a  holder  in  due  course,^!^  though  such  a  mistake  may  be 

48  Mich.  192;  12  N.  W.  36,  distinguishing  Gibbs  v.  Linabury,  22  Mich. 
479,  7  Am.  Rep.  675.  But  see  First  Nat.  Bank  v.  Bryan,  62  Iowa,  42, 
17  N.  W.  165,  where  it  was  held  that  an  innocent  indorsee  of  a  note  se- 
cured by  mortgage  on  a  homestead  could  not  enforce  the  mortgage  as 
against  the  wife  whose  signature  had  been  obtained  by  duress. 

2i6Klar  V.  Kostink,  65  Misc.  199,  119  N.  Y.  Supp.  683.  Promissory  notes 
void  for  usury  as  between  the  original  parties  are  nevertheless  valid  and  en- 
forcible  when  discounted  by  a  state  bank  for  value  before  maturity  in  the 
due  course  of  business,  without  notice  of  their  usurious  inception.  Schles- 
inger  v.  Gilhooley,  189  N.  Y.  1,  81  N.  E.  619,  afg.  116  App.  Div.  914,  101 
N.  Y.  Supp.  1143. 

2i7Buzzell  V.  Tobin,  201  Mass.  1,  86  N.  E.  923;  Middletown  Bank  v. 
Jerome,  18  Conn.  443;  First  Nat.  Bank  v.  Ruhl,  122  Ind.  279,  23  N.  E.  766; 
Arthurs  v.  Hart,  58  U.  S.  (17  How.)  6,  15  Law.  Ed.  338;  Rand  v.  Panta- 
graph  Co.,  1  Colo.  App.  270,  28  Pac.  661;  Culver  v.  Hide  &  Leather 
Bank,  78  111.  625;  Williams  v.  Cheney,  69  Mass.  (3  Grey)  215;  First  Nat. 
Bank  v.  Skeen,  101  Mo.  683,  14  S.  W.  732;  Brookheim  v.  Alexander,  64 
Hun,  458,  19  N.  Y.  Supp.  776;  Hardie  v.  Wright,  83  Tex.  345,  18  S.  W. 
615;  Rea  v.  McDonald,  68  Minn.  187,  71  N.  W.  11;  Kieth  v.  Fork,  105 
Ga.  511,  31  S.  E.  169;  Merchants'  &  Planters'  Bank  v.  Penland,  101 
Tenn.  445,  47  S.  W.  673;  Davis  v.  Howell  Cotton  Co.,  101  Ga.  128,  28 
S.  E.  612. 

Liability   of   accommodation   party   to   holder   for   value,    see   ante,    § 
66. 

2i8Hodges  v.  Nash,  141  111.  391,  31  N.  E.  151;  Yellow  Medicine  County 
Bank  v.  Tagley,  57  Minn.  391,  59  N.  W.  486;  Donovan  v.  Fox,  121  Mo. 
236,  25  S.  W.  915;  Lewis  v.  Long,  102  N.  C.  206,  9  S.  E.  637,  11  Am.  St. 
Rep.  725;  Davy  v.  Kelley,  66  Wis.  452,  29  N.  W.  232;  Miller  v.  Ottaway, 
81  Mich.  196,  45  N.  W.  665,  21  Am.  St.  Rep.  513,  8  L.  R.  A.  428. 

2i9Huston  V.  Young,  33  Me.  85. 


§  171  BONA  FIDE  HOLDERS.  235 

shown  in  his  favor.^^o    Forgery  and  alteration  as  a  defense  against 
a  holder  in  due  course  will  be  considered  in  a  later  chapter.^^i 


Same. 


§  170.  If  an  incomplete  instrument  is  completed  in  disregard 
of  the  authority  given  and  after  the  lapse  of  a  reason- 
able time  is  negotiated  to  a  holder  in  due  course,  it  is 
valid  and  effectual  for  all  purposes  in  his  hands,  and  he 
may  enforce  it  as  if  it  had  been  filled  up  strictly  in  ac- 
cordance with  the  authority  given  and  within  a  reason- 
able time. 

Exception. — Where  an  incomplete  instrument  has 
not  been  delivered  it  will  not,  if  completed  and  nego- 
tiated, without  authority,  be  a  valid  contract  in  the 
hands  of  any  holder,  as  against  any  person  whose  sig- 
nature was  placed  therean  before  delivery. 

§  171.  But  where  the  instrument  is  in  the  hands  of  a  holder  in 
due  course,  a  valid  delivery  thereof  by  all  parties  prior 
to  him  so  as  to  make  them  liable  to  him  is  conclusively 
presumed. 

If  an  instrument  be  signed  and  delivered  in  blank,  with  intent 
that  it  shall  be  converted  into  a  negotiable  instrument,  and,  after 
the  blanks  are  filled  and  the  instrument  completed,  it  is  nego- 
tiated to  a  holder  in  due  course,  it  is  valid  and  effectual  for  all 
purposes  in  his  hands,  and  he  may  enforce  it  according  to  its 
terms,  though  it  was  not  filled  up  within  a  reasonable  time,  or  in 
accordance  with  the  authority  given.222    The  reason  for  the  rule 

220Germania  Bank  v.  Distler,  4  Hun  (N.  Y.)  633,  afd.  64  N.  Y.  642; 
Almich  V.  Downey,  45  Minn.  460,  48  N.  W.  197;  Jessup  v.  Dennison, 
2  Disn.  (Ohio)   150. 

221  Chapter  XV. 

222Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D,.  Okl.,  Ore., 
Pa..  Tenn.,  Utah,  Va..  Wash.,  W.  Va.,  Wyo.   (§  14);  Ariz.  (  §3317);   111. 


236  LIABILITIES  AND  RIGHTS.  §  171 

is  sometimes  placed  on  the  theory  that  the  person  to  whom  the 
instrument  is  delivered  becomes  the  agent  of  the  person  signing, 
and  a  purchaser  is  not  bound  by  limitations  on  the  authority  of 
the  agent,  not  brought  home  to  him;  223  and  sometimes  on  the 
theory  of  estoppel.^^*  As  the  statute  applies  only  to  a  holder  in 
due  course  to  whom  the  instrument  has  been  negotiated,  it  is 
deemed  applicable  only  to  one  who  takes  the  instrument  by  ne- 
gotiation from  another  who  is  a  holder;  225  and  hence  a  payee 

(§  14);  Kan.  (§  21);  Md.  (§  33);  Mich.  (§  16);  Neb.  (§  14);  N.  Y.  (§  33); 
Ohio  (§  3171n);  R.  I.  (§  22);  Wis.  (§  1675-14). 

Thus,   where  the  place   for  the   sum  payable   was   left  blank,   but   "$200" 
was  written  on  the  margin,  a  bona  fide  holder  could  fill  the  blank  with 
any   sum  within   that  amount.     Norwich   Bank   v.    Hyde,    13   Conn.   279. 
Also,    one    who,    with    another,    and    for    accommodation,    signs    a    note 
having  "$45"  expressed  in  one  corner,  but  having  a  blank  for  th€  amount 
in  the  body  of  the  instrument,  and  authorizes  the  other  maker  to  write 
"forty-five  dollars"  in  the  blank  space,  is  liable  to  a  bona  fide  holder  for 
$450,  in  case  the  other  maker  fills  out  the  blank  with  the  words  "four 
hundred  and  fifty,"  and  adds  a  cipher  to  the  "$45."     Johnson  Harvester 
Co.  V.  McLean,  57  Wis.  258,  15  N.  W.  177,  46  Am.  Rep.  39;  Weidman  v. 
Symes,  120  Mich.  657,  79  N.  W.  894,  11  Am.  St.   Rep.   603.     See,   also, 
Snyder  v.  Van  Doren,  46  Wis.  602,  1  N.  W.  285,  32  Am.  Rep.  739,  and 
cases  cited.    The  maker  of  a  note  blank  as  to  the  date,  time  of  maturity, 
amount  and  name  of  the  payee  who  entrusts  it  to  another  with  verbal  in- 
structions to  buy  personal  property  and  fill  in  the  name  of  the  seller  as 
payee   and  the  amount   of  the   purchase   as   the   amount  of  the   note,   is 
liable  to  a  bona  fide  holder  where  the  person  to  whom  the  note  was  en- 
trusted violated  his  instructions,  and  used  the  note  to  procure  a  personal 
loan.     Geddes  v.   Blackmore,   132   Ind.   551,  32  N.   E.   567.     An  acceptor 
who   delivers   a   blank   acceptance  to   another  with   authority,  to   fill   the 
blank  is  liable  to  a  bona  fide  holder  for  the  amount  filled  in,  though  it 
is  greater  than  the  amount  authorized.     Van  Duser  v.  Howe,  21   N.  Y. 
531. 

223Snyder  v.  Van  Doren,  46  Wis.  602,  1  N.  W.  285,  32  Am.  Rep.  739; 
Androscoggin  Bank  v.  Kimball,  64  Mass.  (10  Cush.)  373;  Bank  v.  Neal, 
63  U.  S.  (22  How.)  107,  16  Law.  Ed.  248;  Goodman  v.  Simonds,  61  U.  S. 
(20  How.)  361,  15  Law.  Ed.  458.  See,  also,  Orrick  v.  Carlston,  7  Grat.  (Va.) 
189. 

224Redlich  V.  Doll,  54  N.  Y.  234,  13  Am.   Rep.  573. 

225Herdman  v.  Wheeler,  1  K.  B.  [1902]  361;  Vander  Ploeg  v.  Van 
Zuuk,  135  Iowa,  350,  112  N.  W.  807,  124  Am.  St.  Rep.  275.  The  decision 
of  the  court  in  this  case  is  based  upon  a  consideration  of  the  definitions 
and  applications  of  the   terms   "holder"   and   "holder  in  due   course"  as 


§  171  BONA  FIDE  HOLDERS.  237 

to  whom  paper  is  delivered  after  an  unauthorized  completion  is 
not  within  its  protection,226  This  changes  what  has  been  regarded 
as  well  settled  law,  namely,  that  one  who  intrusts  an  incomplete 
instrument  to  another  to  be  completed  by  him  is  bound  by  an 
excessive  or  erroneous  exercise  of  such  authority  as  to  any  one 
who  relies  in  good  faith  on  the  genuineness  of  such  instrument.^^^ 
The  wisdom  of  this  change  has  been  questioned  upon  the  ground 
that  it  appears  dangerous  to  cast  any  doubt  upon  a  payee's  right 
to  recover  when  he  has  taken  a  bill  or  note  complete  and  regular 
upon  its  face,  honestly  and  for  value.^^s  If  there  was  no  delivery 
with  intent  that  the  instrument  be  thereafter  negotiated,  and  no 
authority,  expressed  or  implied,  to  fill  up  the  blanks,  a  bona  fide 
holder  cannot  enforce  the  instrument  against  the  signer.^^^  This 
rule  of  the  law  merchant  is  also  the  rule  of  the  negotiable  in- 
struments laws.22° 

used  in  the  negotiable  instruments  act,  the  conclusion  of  the  court 
being  that  the  latter  term  seems  unquestionably  to  be  used  to  indicate 
a  person  to  whom  after  completion  and  delivery  the  instrument  has  been 
negotiated.  A  similar  result  has  been  reached  by  the  English  courts 
(Herdman  v.  Wheeler,  1  K.  B.  [1902]  361,  where  it  was  held  that  the 
word  "issue"  as  defined  in  the  act  comprehends  the  excluded  persons 
and  that  had  the  enacting  body  intended  a  different  construction  it 
would  have  made  the  section  read  "if  such  instrument  after  completion 
is  issued  or  nego1:iated  to  a  holder  in  due  course." 

226Vander  Ploeg  v.  Van  Zuuk,  135  Iowa,  350,  112  N.  W.  807,  124  Am. 
St.  Rep.  275.  See,  also,  Guerrant  v.  Guerrant,  7  Va.  Law  Reg.  637.  Com- 
pare Boston  Steel  &  Iron  Co.  v.  Steuer,  183  Mass.  140,  66  N.  E.  646,  97 
Am.  St.  Rep.  426. 

227This  rule  has  been  held  applicable  in  favor  of  the  payee  as  well 
as  a  transferee  of  the  instrument.  Chariton  Plow  Co.  v.  Davidson,  16 
Neb.  374,  20  N.  W.  256;  Johnson  Harvester  Co.  v.  McLean,  57  Wis.  258,  15 
N.  W.  177,  46  Am.  Rep.  39;  Fullerton  v.  Sturges,  4  Ohio  St.  530;  Davis  v. 
Lee,  26  Miss.  505,  59  Am.  Dec.  267. 

228Herdman  v.  Wheeler,  1  K.  B.  [1902]  361. 

229Ledwich  v..  McKim,  53  N.  Y.  307.    But  See  Nance  v.  Lary,  5  Ala.  370. 

230Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  FJa.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or.,  Pa., 
Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  15);  Ariz.  (§  3318);  111.  (§  15); 
Kan.  (§  22);  Md.  (§  34);  Mich.  (§  17);  Neb.  (§  15);  N.  Y.  (§  34); 
Ohio  (§  3171n);  R.  L  (§  23);  Wis.  (§  1675-15). 


238  LIABILITIES  AND  RIGHTS.  §  172 

Contrary  to  the  former  law  of  some  states,^^!  the  negotiable  in- 
struments act  provides  that  where  an  instrument  is  in  the  hands 
of  a  holder  in  due  course  of  business,  a  valid  delivery  by  all  prior 
parties  is  conclusively  presumed.  It  will  be  observed  that  this 
presumption  in  favor  of  a  bona  fide  holder  is  conclusive,  and  that 
want  of  delivery  is  no  defense  as  against  such  a  holder,^^^  but, 
as  has  been  previously  shown,  this  presumption  does  not  obtain, 
as  against  one  signing  before  delivery,  as  to  an  instrument  which, 
having  been  incomplete  and  undelivered,  was  wrongfully  and 
without  authority  completed,  delivered  and  negotiated.^^^ 

§  172.  A  holder  in  due  course  may  enforce  payment  of  the  in- 
strument for  the  full  amount  thereof  as  against  all  parties 
liable  thereon. 

A  holder  in  due  course  not  only  holds  the  instrument  free  from 
all  prior  equities  and  defenses,  as  shown  in  the  preceding  sections, 
but  he  may  also  enforce  payment  of  the  instrument  for  the  full 
amount  thereof  against  all  parties  liable  thereon.^^*  This  rule 
allowing  a  recovery  of  the  face  value  is,  in  effect,  an  amplification 

23iNeg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La.,  Mass., 
Mo.,  Mont.,  Nev.,  N.  H.  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okla.,  Ore.,  Pa.,  Tenn., 
Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  16);  Ariz.  (§  3319);  111.  (§  16); 
Kan.  (§  23);  Md.  (§  35);  Mich.  (§  18);  Neb.  (§  16);  N.  Y.  (§  35); 
Ohio  (§  3171  o);  R.  L  (§  24);  Wis.  (§  1675-16). 

232Clarke  v.  Johnson,  54  111.  296;  McCormick  v.  Holmes,  41  Kan.  265, 
21  Pac.  108;  Kinyon  v.  Wohlford,  17  Minn.  239.  Contra,  see  Palmer  v. 
Poor,  121  Ind.  135,  22  N.  E.  984,  6  L.  R.  A.  469;  Cline  v.  Guthrie,  42 
Ind.  227,  13  Am.  Rep.  357;  Buzzell  v.  Tobin,  201  Mass.  1,  86  N.  E.  923. 
The  conclusive  presumption  of  delivery  in  favor  of  a  bona  fide  holder 
exists  as  well  when  the  note  is  taken  frcm^  a  thief  as  in  any  other  case. 
Massachusetts  Nat.  Bank  v.  Snow,  187  Mass.  159,  72  N.  E.  959. 

233  See  supra,  this  section.  Massachusetts  Nat.  Bank  v.  Snow,  187  Mass. 
159,  72  N.  E.  959. 

234Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.C.,  N.  D.,  Okl.,  Or.,  Pa., 
Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  57);  Ariz.  (§  3360);  111.  (§  57); 
Kan.  (§  64);  Md.  (§  76);  Mich.  (§  59);  Neb.,  (§  57);  N.  Y.  (§  96); 
Ohio  (§  3173B);  R.  L  (§  65);  Wis.   (§  1676-27). 

Not  limited  to  amount  paid  for  note  with  interest.  Jefferson  Bank  of  St. 
Louis  V.  Chapman-White-Lyons  Co.   (Tenn.)   123  S.  W.  641. 


§  172  BONA  FIDE  HOLDEliS.  239 

of  the  rule  that  mere  inadequacy  of  consideration  does  not  sliow 
mala  fides.^ss  As  between  remote  parties  to  a  bill  of  exchange, 
as  the  payee  or  indorsee  and  the  acceptor,  in  order  to  sustain  the 
defense  of  no  consideration,  two  considerations  must  at  least 
come  in  question:  First,  that  which  the  defendant  received  for 
his  liability;  and,  secondly,  that  which  the  plaintiff  gave  for  his 
title.2^*'  An  action  between  remote  parties  will  not  fail  unless 
there  be  an  absence  or  failure  of  both  of  Ihese  considerations.^^^ 
The  rules  do  not,  however,  cure  void,  usurious,^^  or  gaming,239 
transactions,  or  affect  the  doctrine  that  one  who  makes  a  loan 
on  commercial  paper,  or  takes  it  as  security  for  a  precedent  debt, 

The  Wisconsin  negotiable  instruments  law  adds  (§  1676-27):  "Ex- 
cept as  provided  in  sections  1944  and  1945  of  these  statutes  (Rev.  St. 
1878),  relating  to  insurance  premiums,  and  also  in  cases  where  the 
title  of  the  person  negotiating  such  instrument  is  void  under  the  pro- 
visions of  section  1676-25  of  this  act."  Section  1945  provides  that  notes 
or  obligations  given  for  premiums  on  fire  insurance  shall  become  void 
if  the  company  becomes  insolvent  or  bankrupt  during  the  life  of  the 
policy,  as  far  as  the  premium  was  unearned  at  the  time  of  insolvency  or 
bankruptcy.  Section  1944  is  considered  in  section  32,  ante.  Lassas  v. 
McCarthy,  47  Or.  474,  84  Pac.  76. 

235Scott  V.  Seelye,  27  La.  Ann.  95;  Forepaugh  v.  Baker  (Pa.)  13  Atl. 
465;  Daniels  v.  Wilson,  21  Minn.  530. 

236National  Park  Bank  v.  Saitta,  127  App.  Div.  624,  111  N.  Y.  Supp. 
927. 

237  National  Park  Bank  v.  Saitta,  127  App.  Div.  624,  111  N.  Y.  Supp.  927. 
Failure  of  consideration  no  defense  against  bona  fide  holder.  Bank  of 
Guntersville  v.  Joi>es  Cotton  Co.  (Ala.)  46  So.  971.  The  breach  of  an 
executory  agreement  which  forms  the  consideration  for  a  note  is  no 
defense  in  whole  or  in  part  against  an  indorsee  who  took  the  note  be- 
fore maturity,  even  if  he  had  notice  of  the  contract,  unless  he  was  in- 
formed of  the  breach  before  its  purchase.  Black  v.  First  Nat.  Bank, 
96  Md.  399,  54  Atl.  88. 

238Hart  V.  Adler,  109  Ala.  467,  19  So.  894;  Claflin  v.  Boorum,  122  N.  Y. 
385,  25  N.  E.  360;  Ward  v.  Sugg,  113  N.  C.  489,  18  S.  E.  717,  24  L.R.A. 
280.  But  see  Lynchburg  Nat.  Bank  v.  Scott,  91  Va.  652,  22  S.  E.  487, 
50  Am.  St.  Rep.  860,  29  L.  R.  A.  827. 

239Conklin  v.  Roberts,  36  Conn.  461;  Harper  v.  Young,  112  Pa.  419,  3  Atl. 
670;  Traders'  Bank  v.  ALsop,  64  Iowa,  97,  19  N.  W.  863;  Swinney  v.  Ed- 
wards, 8  Wyo.  54,  55  Pac.  306,  80  Am.  St.  Rep.  916. 


240  LIABILITIES  AND  RIGHTS.  §173 

can  recover  only  the  amount  loaned  or  secured.^*"  It  is  doubtful, 
too,  whether  it  will  cure  transactions  in  which  the  consideration 
is  so  grossly  inadequate  as  to  indicate  fraud.^^i  The  rule  affirms 
the  doctrine  of  the  federal  courts,2*2  ^nd  that  of  most  of  the  state 
courts,2*3  but  changes  the  rule  in  others.^** 


Holder  Not  in  Due  Course. 

§  173.  In  the  hands  of  any  holder  other  than  a  holder  in  due 
course,  a  negotiable  instrument  is  subject  to  the  same 
defenses  as  if  it  were  non-negotiable. 

§  174.  But  a  holder  who  derives  his  title  through  a  holder  in 
due  course,  and  who  is  not  himself  a  party  to  any  fraud 
or  illegality  affecting  the  instrument,  has  all  the  rights 
of  such  former  holder  in  respect  of  all  parties  prior  to 
the  latter. 

Where  a  negotiable  instrument  comes  into  the  hands  of  a  holder 
who  is  not  a  holder  in  due  course,  it  is  subject,  as  against  him, 
to  the  same  defenses  as  if  it  were  non-negotiable,^*^  and  this 
rule  applies  also  to  accommodation  paper.^*^ 

240  Cromwell  v.  County  of  Sac,  96  U.  S.  51,  60,  24  Law.  Ed.  681;  Kelly 
V.  Ferguson,  46  How.   Pr.   (N.  Y.)  411. 

24iGould  V.  Stevens,  43  Vt.  125,  5  Am.  Rep.  265;  Hunt  v.  Sanford, 
14  Tenn.  (6  Yerg.)  387;  De  Witt  v.  Perkins,  22  Wis.  451,  99  Am.  Dec.  68; 
Smith  V.  Jansen,  12  Neb.  125,  10  N.  W.  537,  41  Am.  Rep.  761. 
242  Cromwell  v.  County  of  Sac,  96  U.  S.  51,  60,  24  Law.  Ed.  681. 
243Sully  V.  Goldsmith,  32  Iowa,  397;  United  States  Nat  Bank  v.  McNair, 
116  N.  C.  550,  21  S.  E.  389;  Kitchen  v.  Loudenback,  48  Ohio  St.  177, 
26  N.  E.  979,  29  Am.  St.  Rep.  540;  Hobart  v.  Penny,  70  Me.  248. 

244See  Hufif  v.  Wagner,  63  Barb  (N.  Y.)  215,  230;  Todd  v.  Shelbourne, 
8  Hun  (N.  Y.)  512;  Campbell  v.  Brown,  100  Tenn.  245,  48  S.  W.  970. 

245Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.C.,  N.  D.,  Okl.,  Or.,  Pa., 
Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  58);  Ariz.  (§  3361);  111. 
(§  58);  Kan.  (§  65);  Md.  (§  11);  Mich.  (§  60);  Neb.  (§  58);  N.  Y.  §(97); 
Ohio,  (§  3173C);  R.  I.  (§  66);  Wis.  (§  1676-28). 
Weiss  V.  Rieser,  62  Misc.  292,  114  N.  Y.  Supp.  983. 
2i6Marling  v.  Jones,  138  Wis.  82,  119  N.  W.  931. 


§  174  HOLDERS  NOT  IN  DUE  COURSE.  241 

Holder  deriving  title  from  holder  in  due  course. 

An  exception  to  the  rule  laid  down  in  the  last  section  is  found 
in  the  further  rule  that  a  holder  who  derives  his  title  through 
a  holder  in  due  course,  and  who  is  not  himself  a  party  to  any 
fraud  or  illegality  affecting  the  instrument,  has  all  the  rights  of 
such  former  holder  in  respect  to  all  parties  prior  to  the  latter.^^^ 
But  a  payee  who  transfers  a  note  to  a  bona  fide  holder,  and  after- 
wards repurchases  it  for  a  new  consideration,  is  not  a  bona  fide 
holder.  In  a  case  deciding  this  point  the  court  said:  "It  cannot 
be  very  important  to  him  [the  innocent  transferee  from  the 
paj^ee]  that  there  is  one  person  incapable  of  succeeding  to  his 
equities,  and  who  consequently  would  not  be  likely  to  become  a 
purchaser.  If  he  may  sell  to  all  the  rest  of  the  community,  the 
market  value  of  his  security  is  not  likely  to  be  affected  by  the 
circumstances  that  a  single  individual  cannot  compete  for  its  pur- 
chase, especially  when  we  consider  that  the  nature  of  negotiable 
securities  is  such  that  their  market  value  is  very  little  influenced 
by  competition.^*^ 

247Same   sections   of  negotiable   instruments   laws   as   last   above   cited. 

Miller  V.  Talcott,  54  N.  Y.  114;  Cheever  v.  Pittsburg,  S.  &  L.  E.  R. 
Co.,  150  N.  Y.  59,  44  N.  E.  701,  55  Am.  St.  Rep.  646,  34  L.  R.  A.  69; 
Glenn  v.  Farmers'  Bank,  70  N.  C.  191 ;  O'Conor  v.  Clarke  (Cal.)  44  Pac. 
482;  Wood  v.  Starling,  48  Mich.  592,  12  N.  W.  866;  Matson  v.  Alley, 
141  111.  284;  Koehler  v.  Dodge,  31  Neb.  328,  47  N.  W.  913,  28  Am.  St. 
Rep.  518;  Jones  v.  Wiesen,  50  Neb.  243,  69  N.  W.  762;  Knight  v.  Tinney, 
59  Neb.  274,  80  N.  W.  912;  McFarland  v.  State  Bank  of  Chase,  7  Kan. 
App.  122,  52  Pac.  110;  Bank  of  Sonoma  County  v.  Gove,  63  Cal.  355, 
49  Am.  Rep.  92. 

248Kost  V.  Bender,  25  Mich.  515. 


Opp. — Sel. — 16 


CHAPTER  XII. 

PRESENTMENT  FOR  PAYMENT. 


§  175.  When  Necessary. 

§  176.  Instrument  Payable  at  a  Special  Place. 

§  177.  Necessary  to  Charge  Drawers  and  Indorsers. 

§  178.  By  Whom  Made. 

§  179.  To  Whom  Made. 

§  180.  Party  Primarily  Liable  Dead. 

§  181.  Several  Persons  Primarily  Liable. 

§  182.  Time  for  Presentment. 

§  183.  Instruments  Payable  at  Bank. 

§  184.  Day  of  Maturity  Sunday  or  Holiday. 

§  185.  Day  of  Maturity  Saturday. 

§  186.  Days  of  Grace. 

§  187.  Determining  Date  of  Maturity. 

§  188.  Instruments  Payable  and  Not  Payable  on  Demand. 

§  189.  Checks. 

§  190.  Excusable  Delay. 

§  191.  Presentment  to  Acceptor  For  Honor. 

§  192.  Place  For  Presentment. 

§  193.  Manner  of  Presentment. 

§  194.  Dispensing  With  and  Waiver  of  Presentment. 

§  195.  Waiver  of  Protest  Includes. 

§  196.  Dishonor  For  Nonpayment. 

§  197.  Rights  of  Parties  on  Dishonor. 

§  198.  Referees  in  Case  of  Need. 


The  law  simply  requires  substantial  compliance  in  reference 
to  proper  presentment  for  payment,  and,  where  there  has  been 
such  a  compliance,  will  not  strain  to  find  grounds  for  releasing 
an  indorser  on  omission  to  observe  more  technical  rules  not  preju- 
dicing the  indorser.i 

iGilpin  V.  Savage,  60  Misc.  605,  112  N.  Y.  Supp.  802. 

242 


§  177  NECESSITY.  243 

When  Necessary. 

§  175.  Presentment  for  payment  is  not  necessary  in  order  to 
charge  the  person  primarily  liable  on  the  instrument. 

§  176.  If  the  instrument  is,  by  its  terms,  payable  at  a  special 
place,  and  the  party  primarily  liable  is  able  and  willing 
to  pay  it  there  at  maturity,  such  ability  and  willingness 
are  equivalent  to  a  tender  of  payment  upon  his  part. 

§  177.  As  a  general  rule,  presentment  for  payment  is  necessary 
in  order  to  charge  the  drawer  and  indorsers. 

Exceptions. — Presentment  for  payment  is  not  re- 
quired in  order  to  charge  the  drawer  where  he  has  no 
right  to  expect  or  require  that  the  drawee  or  acceptor 
will  pay  the  instrument. 

Presentment  for  payment  is  not  required  in  order 
to  charge  an  indorser  where  the  instrument  was  made 
or  accepted  for  his  accommodation  and  he  has  no 
reason  to  expect  that  the  instrument  will  be  paid  if 
presented. 

Presentment  for  payment  is  not  necessary  to  charge  the  person 
primarily  liable  on  the  instrument,^  that  is,  the  person  who  by  the 

2  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.C.,  N.  D.,  Okl.,  Or.,  Pa., 
Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  70);  Ariz.  (§  3373);  111.  (§  70); 
Kan.  (§  11);  Md.  (§  89);  Mich.  (§  72);  Neb.  (§  70);  N.  Y.  (§  130); 
Ohio  (§  3173  o);  R.  I.  (§  78);  Wis.  (§  1678). 

Florence  O.  &  R.  Co.  v.  First  Nat.  Bank,  38  Colo.  119,  88  Pac.  182; 
Mclntyre  v.  Michigan  State  Ins.  Co.,  52  Mich.  188,  17  N.  W.  781;  Mosser 
V.  Criswell,  ISO  Pa.  409,  24  Atl.  618;  Wilkins  >.  McGuire,  2  App.  D.  C. 
448;  Wamsley  v.  Darragh,  14  Misc.  566,  35  N.  Y.  Supp.  1075;  Cox  v. 
National  Bank,  100  U.  S.  704,  713,  25  Law.  Ed.  739.  In  determining 
who  are  primarily  liable  on  an  instrument,  it  must  be  remembered  that 
no  person  is  liable  unless  his  name  appears  on  the  instrument.  Neg. 
Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La.,  Mass., 
Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or.,  Pa.,  Tenn., 
Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  18);  Ariz.  (§  3321);  111.  (§  18); 
Kan.    (§  25);    Md.    (§  Z1);    Mich.    (§  20);    Neb.    (§  18);    N.    Y.    (§  37); 


244  PRESENTMENT   FOR   PAYMENT.  §177 

terms  of  the  instrument  is  absolutely  required  to  pay  the  same ;  ^ 
but  if  the  instrument  is  by  its  terms  payable  at  a  special  place, 
and  he  is  able  and  willing  to  pay  it  there  at  maturity,  such  ability 
and  willingness  are  equivalent  to  a  tender  on  his  part.*  Both 
under  the  statute,  and  by  the  weight  of  previous  authority  in  this 
country,  contrary  to  the  law  of  England,  where  a  note  or  bill 
of  exchange  is  payable  at  a  particular  time  and  place,  no  de- 
mand or  presentment  at  the  place  named  is  necessary  in  order  to 
entitle  the  holder  to  maintain  an  action  upon  the  note  or  bill 
against  the  maker  or  acceptor.^      The  same  rule  applies  to  a  note 

Ohio  (§  3171q)  ;  R.  I.  (§  26);  Wis.  (§  1676-18).  That  the  drawee  is  not 
liable  until  he  accepts.  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho, 
Iowa,  Ky.,  La.,  Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D., 
Okl,  Or.,  Pa.,  Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§127);  Ariz. 
(§  3430);  111.,  (§  126);  Kan.  (§  134);  Md.  (§  146);  Mich.  (§  129);  Neb. 
(§  126);  N.  Y.  (§  211);  Ohio  (§  3175-R);  R.  I.  (§  135);  Wis.  (§  1680-a). 
And  that  a  bank  is  not  liable  on  a  check  v.ntil  it  accepts  or  certifies  it. 
Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La.,  Mass., 
Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or.,  Pa.,  Tenn., 
Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  189);  Ariz.  (§  3487);  111.  (§  188); 
Kan.  (§  196);  Md.  (§  208);  Mich.  (§  191);  Neb.  (§  188);  N.  Y.  (§  325); 
Ohio  (§  3177z);  R.  I.  (§  197);  Wis.  (§  1684-5). 

The  acceptor  is  primarily  liable  and  hence  is  not  entitled  to  present- 
ment for  payment.     Hunt  v.  Johnson,  96  Ala.  130,  11   So.  387;  James  v. 
Ocoee  Bank,  42  Tenn.    (2  Cold.)    57;   Steiner  v.   Jeffries,   118  Ala.   573,  24 
So.  37.     See  post,  chapter  XVI,  Payment  and  Discharge. 
SNeg.   Inst.    Laws   Colo.,   Conn.,    D.   C,   Fla.,   Idaho,    Iowa,    Ky.,   La., 

Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or.,  Pa., 

Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  192);  Ariz.(§  3488);  111.  (§  191  ; 

(§  19);  Kan.  (§  3);  Md.  (§  15);  Mich.  (§  2);  Neb.  (§  190);  N.  Y.  (§  3); 

Ohio  (§  3178a);  R.  I.  (§  3);  Wis.  (§  1675). 
*Neg.   Inst.    Laws   Colo.,   Conn.,   D.   C,   Fla.,   Idaho,   Iowa,    Ky.,    La., 

Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or.,  Pa., 

Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  70);  Ariz.  (§  3373);  111.  (§  70); 

Kan.    (§  m-,    Md.    (§  89);    Mich.    (§  72);    Neb.    (§  70);    N.    Y.    (§  130); 

Ohio  (§  3173o);  R.  I.  (§  78);  Wis.  (§  1678). 

This  provision  is  not  in  the  negotiable  instruments  law  of  Wisconsin. 

The   negotiable   instruments    law    of   New    York   has    been   amended   by 

inserting   after   the   word   "maturity"    the    clause,    "and   has    funds    there 

available  for  that  purpose."    Laws  1898,  c.  336,  §  11. 

Florence  O.  &  R.  Co.    v.  First  Nat.  Bank,  38  Colo.   119,  88  Pac.   182. 
SFarmers'  Nat.  Bank   v.  Venner,  192  Mass.  531,  78  N.  E.  540. 


§  177  NECESSITY.  245 

payable  on  demand  at  a  particular  place.^  But  not  being  willing 
and  able  to  pay  it  there  at  maturity,  interest  after  maturity  is 
recoverable  though  no  demand  was  made.'' 

Presentment  necessary  to  charge  drawer  ajid  indorsers — Excep- 
tions. 

Presentment  is  necessary,  however,  to  charge  the  drawer  and 
indorsers,^  except  that  it  is  not  required,  in  order  to  charge  a 
drawer,  if  he  has  no  right  to  expect  or  require  that  the  drawee 
or  acceptor  will  pay  the  instrument ;  ^  nor  is  it  necessary  to  charge 

CFarmers'  Nat.  Bank  v.  Venner,  192  Mass.  531,  78  N.  E.  540.  The 
court  says:  "No  demand  is  necessary  before  suit,  where  a  note  is  payable 
generally  on  demand,  and  as  we  have  seen  no  demand  is  necessary 
when  a  note  is  payable  on  time  at  a  particular  place.  It  seems  to  us 
that  the  fact  that  both  circumstances  are  found  in  the  sam^  note  cannot 
operate  to  change  the  rule  and  render  a  demand  necessary  when  it  would 
not  otherwise  be  required." 

In  an  action  on  a  note  payable  at  a  specified  place,  a  demand  need 
not  be  averred  or  proved,  and,  if  the  maker  was  ready  and  offered  at  the 
time  and  place  to  pay  it,  this  'is  a  matter  of  defense  to  be  pleaded  and 
proved  by  him.  Florence  O.  &  R.  Co.  v.  First  Nat.  Bank,  38  Colo.  119, 
88  Pac.  265. 

7  Parsons  v.  Utica  Cement  Mfg.  Co.,  80  Conn.  58,  66  Atl.  1024. 

8Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or.,  Pa., 
Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  70);  Ariz.  (§  3373);  111. 
(§  70);  Kan.  (§  11);  Md.  (§  89);  Mich.  (§  72);  Neb.  (§  70);  N.  Y. 
(§  130);   Ohio   (§  3173o);  R.   I.   (§  78);  Wis.   (§  1678). 

Presbrey  v.  Thomas,  1  App.  D.  C.  171;  Howard  Bank  v.  Carson,  50 
Md.  18;  Seacord  v.  Miller,  13  N.  Y.  55.  Presentment  is  necessary  to 
charge  the  drawer  of  a  bill.  Hoyt  v.  Seeley,  18  Conn.  353;  Jaudon  v 
Read,  32  How  Pr.  (N.  Y.)  190;  Grange  v.  Reigh,  93  Wis.  552,  67  N.  W. 
1130.  It  is  also  necessary  to  charge  the  drawer  of  a  check.  Daniels  v. 
Kyle,  5  Ga.  245;  Green  v.  Darling,  15  Me.  139;  Gough  v.  Staats,  13 
Wend.  (N.  Y.)  549;  Kelly  v.  Brown,  71  Mass.  (5  Gray)  108;  Scott  v. 
Meeker,  20  Hun  (N.  Y.)  161.  Presentment  of  a  non-negotiable  instrument 
IS  not  necessary.  White  v.  Low,  7  Barb.  (N.  Y.)  204;  Smith  v.  Cromer, 
66  Miss.  157,  5'  So.  619. 

9Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or.,  Pa., 
Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  79);  Ariz.  (§  3382);  111. 
(§  79);    Kan.    (§  86);    Md.    (§  98);    Mich.    (§  81);    Neb.    (§  79);    N.    Y. 


246  PRESENTMENT   FOR   PAYMENT.  §  178 

an  indorser  where  the  instrument  was  made  or  accepted  for  his 
accommodation,  and  he  has  no  reason  to  expect  that  the  instru- 
ment will  be  paid  if  presented.^" 

By  Whom  Made. 

§  178.  Presentment  for  payment  to  be  sufficient  must  be  made  by 
the  holder,  or  by  some  person  authorized  to  receive  pay- 
ment on  his  behalf. 

Presentment  for  payment  must  be  made  by  the  holder  or  by 
some  person  authorized  to  receive  payment  on  his  behalf.^^  It  is 
not  necessary  that  presentment  be  made  by  a  notary ;  ^^  but  any 
person  who  has  possession  of  the  instrument  at  the  time  and  place 

(§  139);  Ohio  (§  3173x);  R.  I.  (§  87);  Wis.   (§  1678-9). 

Dickins  v.  Beal,  35  U.  S.  (10  Pet.)  572,  9  Law.  Ed.  246;  Rhett  v.  Poe, 
43  U.  S.  (2  How.)  457,  11  Law.  Ed.  167.  Lack  of  funds  in  hands  of  drawee, 
see  Howes  v.  Austin,  35  111.  396;  Beauregard  v.  Knowlton,  156  Mass. 
395,  31  N.  E.  389;  Franklin  v.  Vanderpool,  1  N.  Y.  Super.  Ct.  78.  Where 
the  drawer  obtains  an  acceptance  and  indorsement  for  his  accommoda- 
tion and  receives  the  proceeds  of  the  bill,  he  is  not  entitled  to  present- 
ment for  payment.     Barbaroux  v.  Waters,  3  Mete.  (Ky.)  304. 

lONeg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or.,  Pa., 
Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  80);  Ariz.  (§  3383);  111. 
(§  80);  Kan.  (§  87);  Md.  (§  99);  Mich.  (§  82);  Neb.  (§80);  N.  Y.  (§  140); 
Ohio  (§  3173y);  R.  I.  (§  88);  Wis.  (§  1678-10). 

Luckenbach  v.  McDonald,  164  Fed.  296;  Reid  v.  Morrison,  2  Watts 
&  S.   (Pa.)  401. 

iiNeg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or.,  Pa., 
Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  72);  Ariz.  (§  3375);  111.  (§  72); 
Kan.  (§  79);  Md.  (§  91);  Mich.  (§  74);  Neb.  (§  12);  N.  Y.  (§  132); 
Ohio  (§  3173q);  R.  I.   (§  80);  Wis.   (§  1678-2). 

i2Cole  V.  Jessup,  10  N.  Y.  96;  Shed  v.  Brett,  18  Mass.  (1  Pick.)  401; 
Sussex  Bank  v.  Baldwin,  17  N.  J.  Law,  487,  where  the  court  said: 
"There  is  an  impression  current,  in  some  degree,  that  a  presentment 
of  a  note  must  be  made  by  a  notary,  or  at  least  on  his  behalf,  and  that  he 
must  protest  it  upon  nonpayment  before  the  indorser  is  liable.  But  this 
is  not  so.  Any  person  may  present  at  its  maturity  a  promissory  note 
of  which  he  is  put  in  possession." 


§181  TO  WHOM  MADE.  247 

of  payment  is  deemed  prima  facie  to  have  authority  and  may 
present  the  instrument  for  payment.^^ 

To  Whom  Made. 

§  179.  Presentment  for  payment  must  be  made  to  the  person  pri- 
marily liable  on  the  instrument,  or  if  he  is  absent  or  in- 
accessible, to  any  person  found  at  the  place  where  the 
presentment  is  made. 

§  180.  Where  the  person  primarily  liable  on  the  instrument  is 
dead,  and  no  place  of  payment  is  specified,  presentment 
for  payment  must  be  made  to  his  personal  representative, 
if  such  there  be,  and  if,  with  the  exercise  of  reasonable 
diligence,  he  can  be  found. 

§  181.  Where  there  are  several  persons,  not  partners,  primarily 
liable  on  the  instrument,  and  no  place  of  payment  is 
specified,  presentment  must  be  made  to  them  all. 

Where  the  persons  primarily  liable  on  the  instrument 
are  liable  as  partners,  and  no  place  of  payment  is  speci- 
fied, presentment  for  payment  may  be  made  to  any  one 
of  them,  even  though  there  has  been  a  dissolution  of  the 
firm. 

Presentment  for  payment  must  be  made  to  the  person  primarily 
liable,  or,  if  he  is  absent  or  inaccessible,  to  any  person  found  at 
the  place  of  presentment.^*     Where  the  person  primarily  liable 

isCole  V.  Jessup,  10  N.  Y.  96;  Baer  v.  Leppert,  12  Hun  (N.  Y.)  516; 
Sussex  Bank  v.  Baldwin,  17  N.  J.  Law,  487.  But  see  Doubleday  v.  Kress, 
50  N.  Y.  410.  One  holding  an  instrument  for  collection  is  deemed  a 
holder  within  the  rule.  Freeman's  Bank  v.  Perkins,  18  Me.  292;  Blakeslee 
V.  Hewitt,  76  Wis.  341,  44  N.  W.  1105. 

i^Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C.,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or.,  Pa., 
Tenn.,  Utah,  V.a.,  Wash.,  W.  Va.,  Wyo.  (§  72);  Ariz.  (§  3375);  111.  (§  72); 
Kan.  (§  79);  Md.  (§  91);  Mich.  (§  74);  Neb.  (§  72);  N.  Y.  (§  132); 
Ohio  (§  3173q);  R.  I.  (§  80);  Wis.  (§  1678-2). 

The  temporary  absence  of  an  indorser  from  his  place  of  business 
does  not  excuse  nonpresentment.     Wilson  v.  Senier,   14  Wis.  411.     See, 


248  PRESENTMENT  FOR   PAYMENT.  §181 

is  dead,  and  no  place  of  payment  is  specified,  presentment  for 
payment  may  be  made  to  his  personal  representative,  if  there  be 
one,  and  he  can  be  found  after  the  exercise  of  reasonable  dili- 
gence,^^ and  presentment  at  a  national  bank  in  the  hands  of  a 
receiver  is  sufficient.^^  If  the  persons  primarily  liable  were  part- 
ners, and  no  place  of  payment  was  specified,  presentment  for  pay- 
ment may  be  made  to  any  one  of  them,^'''  even  after  a  dissolution 
of  the  firm.^^  Where  there  are  several  persons,  not  partners, 
primarily  liable  on  the  instrument,  and  no  place  of  payment  is 
specified,  presentment  must  be  made  to  them  all.^^    This  is  the 

also,  Granite  Bank  v.  Ayers,  33  Mass.  (16  Pick.)  392.  Who  is  person  pri- 
marily liable,  see  note  2,  supra. 

iSNeg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or.,  Pa., 
Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  76);  Ariz.  (§  3379);  111.  (§  76); 
Kan.  (§  83);  Md.  (§  95);  Mich.  (§  78);  Neb.  (§  76);  N.  Y.  (§  136); 
Ohio  (§  3173v);  R.  L  (§  84);  Wis.  (§  1678-6). 

Reed  v.  Spear,  107  App.  Div.  144,  94  N.  Y.  Supp.  1007;  Huff  v.  Ashcraft, 
1  Disn.   (Ohio)   277. 

Presentment   on   death   of   one   of  two   partners   who   are   makers,   see 
note  18,  infra. 
16  Schlesinger  v.  Schultz,  110  App.  Div.  356,  96  N.  Y.  Supp.  383. 
i^Mount   Pleasant   Branch   of   State   Bank  v.    McLeran,   26   Iowa,   306; 
Hunter   v.    Hempstead,    1    Mo.    67. 

Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C.,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or.,  Pa., 
Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  77);  Ariz.  (§  3380);  111.  (§  77); 
Kan.  (§  84);  Md.  (§  96);  Mich.  (§  79);  Neb.  (§  77);  N.  Y.  (§  137); 
Ohio  (§  3173v);  R.  I.  (§  85);  Wis.  (§  1678-7). 

isSame    sections    of   negotiable    instruments   laws    as    last   above    cited. 
Barry  v.  Crowley,  4  Gill.  (Md.)  194;  First  Nat.  Bank  v.  Heuschen,  52  Mo. 
207. 

After  dissolution  by  bankruptcy,   see  Gates  v.  Beecher,  60  N.   Y.  518. 
After   dissolution  by  death   of  one  partner,   see   Cayuga   County   Bank 
V.  Hunt,  2  Hill    (N.  Y.)  635;  Barlow  v.  Coggan,  1  Wash.  T.  257. 

i9Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C.,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl..  Or.,  Pa., 
Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  78);  Ariz.  (§  3381);  111. 
(§  78);  Kan.  (§  85);  Md.  (§  97);  Mich.  (§  80);  Neb.  (§  78);  N.  Y. 
(§  138);   Ohio   (§  3173v);  R.  I.   (§  86);  Wis.   (§  1678-8). 


§  185  TIME.  249 

rule  in  force  in  most  of  the  states,^^  and  has  been  applied  where 
one  or  more  of  the  makers  were  sureties.-^  Compliance  with  this 
latter  rule  proving  impracticable,  such  presentment  may  be  dis- 
pensed with  under  the  rule  allowing  one  so  to  do,  where,  after 
the  exercise  of  reasonable  diligence,  presentment  as  required  by 
the  act  cannot  be  made.^^ 


Time. 

§  182,  Presentment  for  payment,  to  be  sufficient,  must  be  made 
at  a  reasonable  hour  on  a  business  day. 

§  183.  Where  the  instrument  is  payable  at  a  bank,  presentment 
for  payment  must  be  made  during  banking  hours,  unless 
the  person  to  make  payment  has  no  funds  there  to  meet  it 
at  any  time  during  the  day,  in  which  case  presentment 
at  any  hour  before  the  bank  is  closed  on  that  day  is  suf- 
ficient. 

§  184.  When  the  day  of  maturity  falls  upon  Sunday,  or  a  holiday, 
the  instrument  is  payable  on  the  next  succeeding  business 
day. 

§  185.  Instruments  falling  due  on  Saturday  are  to  be  presented 
for  payment  on  the  next  succeeding  business  day,  except 
that  instruments  payable  on  demand  may,  at  the  option 
of  the  holder,  be  presented  for  payment  before  twelve 
o'clock  noon  on  Saturday  when  that  entire  day  is  not  a 
holiday. 
Presentment  for  payment  must  be  made  at  a  reasonable  hour 

20Bank  of  Red  Oak  v.  Orvis,  40  Iowa,  332;  Arnold  v.  Dresser,  90 
Mass.  (8  Allen)  435;  Benedict  v.  Schmieg,  13  Wash.  476. 

2iBritt  V.  Lawson,  15  Hun    (N.  Y.)    123. 

22Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or.,  Pa., 
Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  82);  Ariz.  (§  3385);  111. 
(§  82);  Kan.  (§  89):  Md.  (§  101);  Mich.  (§  84);  Neb.  (§  82);  N.  Y. 
(§  142);   Ohio   (§  3174);  R.  I.   (§  90);  Wis.   (§  1678-12). 

See  post,  §  194. 


250  PRESENTMENT   FOR   PAYMENT.  §  185 

on  a  business  day.^s  What  is  a  reasonable  hour  within  this  rule 
depends  on  cireumstances,^*  and  is  to  be  determined  by  reference 
to  the  general  custom  at  the  place  of  the  particular  transaction 
in  question.25  In  case  of  a  transaction  occurring  in  a  foreign  juris- 
diction, the  court  cannot  take  judicial  notice  of  what  constitutes 
a  reasonable  hour  on  a  business  day.^^  It  is  a  matter  of  proof, 
though  a  notarial  certificate  of  the  transaction,  being  regular  so 
as  to  furnish  prima  facie  proof  that  the  paper  was  duly  presented 
for  payment,  raises  a  presumption  that  the  presentment  was  made 
at  a  proper  time.^^ 

Instruments  payable  at  bank. 

Where  the  instrument  is  payable  at  a  bank,  presentment  must 
be  made  during  banking  hours,  unless  the  person  to  make  pay- 
ment has  no  funds  there  to  meet  it  at  any  time  during  the  day, 
in  which  case  presentment  at  any  hour  before  the  bank  is  closed 
on  that  day  is  sufficient.^s    What  constitutes  banking  hours  is  to 

23Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or.,  Pa., 
Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  72);  Ariz.  (§  3375);  111. 
(§  72);  Kan.  (§  79);  Md.  (§  91);  Mich.  (§  74);  Neb.  (§  72);  N.  Y. 
(§  132);  Ohio  (§  3173q);  R.  I.  (§  80);  Wis.  (§  1678-2). 

Cayuga  County  Bank  v.  Hunt,  2  Hill  (N.  Y.)  635. 

21 A  presentment  at  a  bank  after  business  hours  on  the  day  of  maturity, 
but  before  the  officers  had  left  the  bank,  was  sufficient.  Allan  v.  Avery, 
47  Me.  287.  A  presentment  at  9  o'clock  P.  M.,  on  the  last  day  of  grace, 
at  the  residence  of  the  maker  after  he  had  retired,  was  sufficient.  Farns- 
worth  V.  Allen,  70  Mass.  (4  Gray)  453. 

25Columbian  Banking  Co.  v.  Bowen,  134  Wis.  218,  114  N.  W.  451. 

26  Columbian  Banking  Co.  v.  Bowen,  134  Wis.  218,  114  N.  W.  451.  On 
the  question  whether  a  presentment,  at  5:20  o'clock  P.  M.,  of  a  note 
payable  at  an  office  in  an  insurance  building  in  Chicago,  was  made  within 
business  hours,  evidence  as  to  what  were  the  ordinary  business  hours 
in  that  city  was  admissible.  Clough  v.  Holden,  115  Mo.  336,  21  S.  W. 
1071. 

27Columbian  Banking  Co.  v.  Bowen,  134  Wis.  218,  114  N.  W.  451. 

28  Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or.,  Pa., 
Tenn.,    Utah,   Va.,    Wash.,    W.    Va.,    Wyo.    (§  75);    Ariz.    (§  3378);    111. 


§  185  INSTRUMENTS  PAYABLE  AT  BANK.  251 

be  determined  by  reference  to  the  general  custom  at  the  place  of 
the  particular  transaction  in  question,^^  and  the  court  cannot 
take  judicial  notice  of  what  constitutes  the  custom  in  foreign 
jurisdictions,^"  but  such  custom  is  a  matter  of  proof.^^  Present- 
ment a  few  minutes  after  the  regular  time  for  closing  is  sufficient 
if  such  is  the  custom  of  the  bank ;  ^^  but  a  presentment  to  an  offi- 
cer of  the  bank  out  of  business  hours  would  not  ordinarily  be  suf- 
ficient.22 

(§  75);  Kan.  (§  82);  Md.  (§  94);  Mich.  (§  11);  Neb.  (§  75);  N.  Y. 
(§  135);  Ohio   (§  3173t);   R.  I.   (§  83);  Wis.   (§  1678-5). 

Matlock  V.  Scheuerman  (Or.)  93  Pac.  823.  See  Allen  v.  Avery,  47 
Me.  287. 

Since  the  maker  of  a  note  paj^able  at  a  bank  has  up  to  the  close  of 
business  hours  to  deposit  money  to  meet  it,  presentment  should  be  made 
at  the  time  of  closing.  Church  v.  Clark,  38  Mass.  (21  Pick.)  310;  Harri- 
son V.  Crowder,  14  Miss.  (6  Smedes  &  M.)  464.  Where  the  office  hours 
of  a  bank  ended  at  4  o'clock  P.  M.,  and  the  indorser  of  a  note  payable 
there  was  ready  to  pay  the  same  on  the  day  of  its  maturity,  and  on  that 
day  sent  the  maker  to  the  bank  several  times  to  see  if  the  note  was 
there  and  ascertain  its  amount,  and  the  maker  was  informed  that  the 
note  was  not  there,  but  the  note  was  finally  presented  at  the  bank  on 
that  day  by  the  holder,  who  obtained  admittance  at  about  5  o'clock 
P.  M.,  and  demanded  payment,  which  was  refused  because  no  funds  had 
been  furnished  to  meet  the  note,  the  indorser  was  held  liable,  the  court 
stating  that  the  circumstances  did  not  take  the  case  out  of  the  general 
rule,  and  that  "had  the  maker  gone  to  the  bank  prepared  to  pay  the 
note,  and  waited  there  for  that  purpose  until  the  close  of  business  hours, 
and  then  left,  or  had  he  placed  funds  in  the  bank  and  allowed  them  to  re- 
main there  until  the  close  of  business  hours,  and  then  withdrawn  them 
in  consequence  of  the  nonpresentment  of  the  note,  we  are  of  the  opinion 
that  a  subsequent  presentation  would  not  have  been  sufficient  to  charge 
the  indorser."  Salt  Springs  Nat.  Bank  v.  Burton,  58  N.  Y.  430,  citing 
Bank  of  Syracuse  v.  Hollister,  17  N.  Y.  46;  Shepherd  v.  Chamberlain, 
74  Mass.  (8  Gray)  225;  Flint  v.  Rogers,  15  Me.  67;  Allen  v.  Avery,  47 
Me.    287. 

29Columbian  Banking  Co.  v.  Bowen,  218  Wis.  4,  51,   114  N.  W.  451. 

30Columbian  Banking  Co.  v.  Bowen,  218  Wis.  4,  51,   114  N.  W.  451. 

siColumbian  Banking  Co.  v.  Bowen,  218  Wis.  4,  51,   114  N.  W.  451. 

32Bank  of  Utica  v.  Smith,  18  Johns.  (N.  Y.)  230.  See,  also,  Salt  Springs 
Nat.  Bank  v.  Burton,  58  N.  Y.  430. 

33S\van  v.  Hodges,  40  Tenn.  (3  Head)  251. 


252  PRESENTMENT   FOR   PAYMENT.  §185 

Day  of  maturity  is  Sunday  or  a  holiday. 

AVhen  the  day  of  maturity  falls  on  Sunday  or  a  holiday,  the  in- 
strument IS  payable  on  the  next  succeeding  business  day.^*  This 
rule  is  an  application  of  the  general  rule  that  where  the  day,  or 
the  last  day,  for  doing  any  act  required  or  permitted  by  the  nego- 
tiable instruments  laws,  falls  on  Sunday  or  a  holiday,  the  act 
may  be  done  on  the  next  succeeding  secular  or  business  day.^^ 

Day  of  maturity  is  Saturday. 

Instruments  falling  due  on  Saturday  are  to  be  presented  for 
payment  on  the  next  succeeding  business  day,  except  that  instru- 
ments payable  on  demand  may,  at  the  option  of  the  holder,  be 
presented  for  payment  before  twelve  o'clock  noon  on  Saturday 
when  that  entire  day  is  not  a  holiday .^^    This  provision  is  not  in 

3*Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or., 
Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  85);  Ariz.  (§  3388);  111. 
(§  85);  Kan.  (§  92);  Md.  (§  104);  Mich.  (§  87);  Neb.  (§  85);  N.  Y. 
(§  145);  Ohio  (§  3174c);  R.  L   (§  93);  Wis.   (§  1678-15). 

35Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or.,  Pa., 
Tenn.,  Utah,  Va.,  Wash.,  W.  V.,  Wyo.  (§  194);  Ariz.  (§  3490);  111. 
(§  193);  Kan.  (§  5);  Md.  (§  17);  Mich.  (§  2);  Neb.  (§  192);  N.  Y. 
(§  5);  Ohio  (§  3178c);  R.  I.  (§  5);  Wis.  (§  1675). 

36Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C.,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or.,  Pa., 
Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  85);  Ariz.  (§  3388);  111. 
(§  85);  Kan.  (§  92);  Md.  (§  104);  Mich.  (§  87);  Neb.  (§  85);  N.  Y. 
(§  145);  Ohio  (§  3174c);  R.  I.  (§  93);  Wis.  (§  1678-15). 

This  provision  of  the  negotiable  instruments  law  has  been  amended 
in  New  York  by  inserting  after  the  words  "instruments  falling  due" 
the  words  "or  becoming  payable."    Laws  1898,  c.  336,  §  13. 

Saturday  afternoon  was  made  a  half  holiday  in  New  York  by  Laws 
1887,  c.  289,  §  1.  See  Sylvester  v.  Crohan,  138  N.  Y.  494,  34  N.  E.  273, 
where  it  was  held  that  "a  party  whose  duty  it  is  to  collect  or  present 
for  payment  a  bill,  note  or  draft  which  falls  due  on  Saturday,  is  not 
chargeable  with  neglect  or  omission  of  duty  because  of  failure  to  pre- 
sent it  on  that  day,  providing  he  does  present  it  on  Monday,  or  the  next 
secular  day,  and  then,  on  that  daj^  gives  notice  of  dishonor  in  case  of 
nonpayment." 


§  186  DAYS  OF  GRACE.  253 

the  negotiable  instmments  law  of  "Wisconsin,^^  and  in  that  state 
instruments  falling  due  on  Saturday  are  payable  on  that  day.  In 
the  negotiable  instruments  law  of  Colorado  is  a  provision  that 
"instruments  falling  due  on  any  day,  in  any  place  where  any  part 
of  such  day  is  a  holiday,  are  to  be  presented  for  payment  on  the 
next  succeeding  business  day,  except  that  instruments  payable 
on  demand  may,  at  the  option  of  the  holder,  be  presented  for  pay- 
ment during  reasonable  hours  of  the  part  of  such  day  which  is 
not  a  holiday."  ^ 

§  186.     Every  negotiable  instrument  is  payable  at  the  time  fixed 
therein  without  grace.         ^  a     a  j  a  (j  ^     i^i  ^ 

Most  of  the  negotiable  instruments  laws  contain  the  provision 
that  "every  negotiable  instrument  is  payable  at  the  time  fixed 
therein  without  grace.  "^^  But  three  daj's  of  grace  are  allowed 
on  sight  drafts  by  the  negotiable  instruments  law  of  Rhode 
Island ;  *°  and  on  notes,  acceptances,  and  sight  drafts  by  the  law 
as  adopted  in  North  Carolina ;  *^  while  the  negotiable  instruments 
act  as  first  adopted  in  Massachusetts  has  already  been  amended  so 
as  to  allow  three  days  of  grace  on  sight  drafts.*^  Under  the  Eng- 
lish Bills  of  Exchange  Acts  1882,  providing  that  a  bill  is  due  and 
payable  "on  the  last  day  of  grace,"  the  holder  cannot  begin,  on 
the  last  day  of  grace,  an  action  against  the  acceptor,  who  had  re- 
fused payment  on  that  day,  as  no  cause  of  action  arises  until  after 
the  expiration  of  that  day.^^ 

37See  Negotiable  Inst.  Law,  §  1678-15. 

ssNegotiable  Inst.  Law,  §  85. 

39Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or.,  Pa., 
Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  85);  Ariz.  (§  3388);  111.  (§  85); 
Kan.  (§  92);  Md.  (§  104);  Mich.  (§  87);  Neb.  (§  85);  N.  Y.  (§  145); 
Ohio  (§  3174c);  R.  I.  (§  93);  Wis.  (§  1678-15). 

*0Negotiable  Inst.  Law,  §  93. 

"Negotiable  Inst.  Law,  §  85. 

42Act  March  6,  1899. 

*345  &  46  Vict.  c.  61,  §  14,  subd.  1.    Kennedy  v.  Thomas  [1894]  2  Q.  B.  759. 


254  PRESENTMENT   FOR   PAYMENT.  §187 

§  187.  Where  the  instrument  is  payable  at  a  fixed  period  after 
date,  after  sight,  or  after  the  happening  of  a  specified 
event,  the  time  of  paj'-ment  is  determined  by  excluding 
the  day  from  which  the  time  is  to  begin  to  run,  and  by 
including  the  date  of  payment. 

The  instrument  being  payable  at  a  fixed  period  after  date,  after 
sight,  or  after  the  happening  of  a  specified  event,  the  time  of 
payment  is  determined  by  excluding  the  day  from  which  the  time 
is  to  begin  to  run  and  including  the  day  of  payment.** 

§  188.  Where  the  instrument  is  not  payable  on  demand,  present- 
ment must  be  made  on  the  day  it  falls  due.  Where  it  is 
payable  on  demand,  presentment  must  be  made  within 
a  reasonable  time  after  its  issue,  except  that  in  the  case 
of  a  bill  of  exchange,  presentment  for  payment  will  be 
sufficient  if  made  within  a  reasonable  time  after  the  last 
negotiation  thereof. 

§  189.  A  check  must  be  presented  for  payment  within  a  reason- 
able time  after  its  issue  or  the  drawer  will  be  discharged 
from  liability  thereon  to  the  extent  of  the  loss  caused  by 
the  delay. 

Instruments  not  payable  on  demand. 

Instruments  not  joayable  on  demand  must  be  presented  for  pay- 
ment on  the  day  they  fall  due.^^    Under  this  provision  of  the  ne- 

44Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or.,  Pa., 
Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  86);  Ariz.  (§  3389);  111.  (§  86); 
Kan.  (§  93);  Md.  (§  105);  Mich.  (§  88);  Neb.  (§  86);  N.  Y.  (§  146); 
Ohio  (§  3174d);  R.  I.  (§  94);  Wis.  (§  1678-16). 

See  New  York  Statutory  Construction  Law,  §§  26,  27. 

45Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or.,  Pa.. 
Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  71);  Ariz.  (§  3374);  111. 
(§  71);  Kan.  (§  78);  Md.  (§  90);  Mich.  (§  72,);  Neb.  (§  71);  N.  Y. 
(§  131);  Ohio   (§  3173p);   R.  L   (§  79);  Wis.   (§  1678-1). 

Days  of  grace  abolished,  see  ante,  §  136.  For  time  of  maturity  in  general, 
see  ante,  §  135. 


§  189  DEMAND  PAPER.  255 

gotiable  instruments  laws  it  has  been  held  that  if  notes  in  a  series 
are  payable  at  different  times,  and  default  in  payment  of  the  first 
is  to  mature  the  others  immediately,  the  holders  of  others  than 
the  first  have  a  reasonable  time  within  which  to  present  them 
after  the  dishonor  of  the  first  note.^^ 

Instruments  payable  on  demand. 

The  negotiable  instruments  laws  have  changed  the  rule,  in  sev- 
eral states,^'''  as  to  the  time  for  presentment  of  an  instrument  pay- 
able on  demand,  by  providing  that  presentment  of  such  instru- 
ment for  payment  must  be  made  within  a  reasonable  time  after 
their  issuance,  except  that,  in  case  of  a  bill  of  exchange,  pre- 
sentment for  payment  within  a  reasonable  time  after  the  last  ne- 
gotiation is  sufficient.*^    A  note  payable  "on  demand  after  date" 

<8Creteau  v.  Foote,  40  App.  Div.  215,  57  N.  Y.  Supp.  1103. 

^^Massachusetts,  where  demand  notes  have  hitherto  been  overdue  at 
the  end  of  60  days  from  date  (St.  1839,  c.  121,  §  2.  See  Rice  v.  Wesson, 
52  Mass.  [11  Mete]  400);  Connecticut,  where  they  could  be  presented 
within  four  months  (Gen.  St.  p.  405;  Rhodes  v.  Seymour,  36  Conn.  1); 
and  New  York,  where  they  were  treated  as  good  security  for  indefinite 
time  (Merritt  v.  Todd,  23  N.  Y.  28;  Parker  v.  Stoud,  98  N.  Y.  379,  rvg. 
31  Hun.  [N.  Y.]  578).  In  Vermont  demand  notes  muust  be  presented 
within  60  days.  Rev.  Laws,  §  2013.  Verder's  Ex'r  v.  Verder,  63  Vt.  38,  21 
Atl.  611. 

*8Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or.,  Pa., 
Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  71);  Ariz.  (§  3374);  111. 
(§71);  Kan.  (§78);  Md.  (§90);  Mich.  (^73);  Neb.  (§71);  N.  Y.  (§  131); 
Ohio  (§  3173p);  R.  I.  (§  79);  Wis.  (§  1678-1). 

To  hold  indorser,  presentment  for  payment  must  be  made  within  a 
reasonable  time.  Aebi  v.  Bank  of  Evansville,  124  Wis.  73,  102  N.  W. 
329.  As  regards  indorsers,  presentment  for  payment  is  sufficient  if 
made  within  a  reasonable  time  after  the  last  negotiation.  Columbian 
Banking  Co.  v.  Bowen,  134  Wis.  218,  114  N.  W.  451;  Plover  Sav.  Bank 
v.  Moodie,  135  Iowa,  685,  110  N.  W.  29.  A  failure  to  demand  pay- 
ment of  a  demand  note  for  two  and  one-half  years,  or  to  notify  the  in- 
dorsers, releases  them.  Home  Sav.  Bank  v.  Hosie,  119  Mich.  116,  77  N. 
W.  625.  Effect  of  negotiation  as  extending  time,  see  Rice  v.  Wesson,  52 
Mass.  (11  Mete.)  400;  Union  Bank  v.  Ezell,  29  Tenn.  (10  Humph.)  385; 
Corwith  V.  Morrison,  1   Pin.   (Wis.)  489. 


256  PRESENTMENT  FOR   PAYMENT.  §189 

is  a  demand  note  and  not  one  payable  on  a  fixed  day,  hence  need 
only  be  presented  for  payment  within  a  reasonable  time.*^  In 
considering  what  is  a  "reasonable  time,"  regard  is  to  be  had  to 
the  usage  of  the  trade,  the  nature  of  the  instrument,  and  the  facts 
of  the  particular  case.^°  The  facts  being  disputed  and  the  evi- 
dence conflicting,  the  question  is  a  mixed  one  of  law  and  fact  to 
be  decided  by  the  jury  under  instructions  from  the  court,  but 
where  the  facts  are  not  in  dispute  the  question  is  one  of  law.^^ 
The  burden  being  on  the  holder  to  prove  due  and  timely  pre- 
sentment, the  fact  that  it  was  not  so  presented  need  not  be  spe- 
cially pleaded  by  the  indorser.^^ 

The  statutory  requirement  that  a  note  payable  on  demand  must 
be  presented  for  payment  within  a  reasonable  time  is  in  the  nature 
of  a  statute  of  limitations,^^  and  hence  the  burden  is  on  one 
claiming  it  was  not  so  presented  to  plead  and  prove  such  fact, 
and  if  he  fails  to  do  so  he  will  be  deemed  to  have  waived  the  de- 
fense.^* 

Checks. 

A  check,  being  a  bill  payable  on  demand,^^  is  governed  by  the 
above  rule,  and  must  be  presented  for  payment  within  a  reason- 
able time  after  its  issuance,  or  the  drawer  will  be  discharged 
from  liability  ■  thereon  to  the  extent  of  the  loss  caused  by  the 

49Schlesinger  v.  Schultz,  110  App.  Div.  356,  96  N.  Y.  Supp.  383. 

50Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or.,  Pa., 
Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  193);  Ariz.  (§  3489);  111. 
(§  192);  Kan.  (§  4);  Md.  (§  16);  Mich.  (§  2);  Neb.  (§  191);  N.  Y. 
(§  4);  Ohio  (§  3178B);  R.  I.  (§  4);  Wis.  (§  1675). 

German  American  Bank  v.  Mills,  99  App.  Div.  312,  91  N.  Y.  Supp.  142; 
Anderson  v.  First  Nat.  Bank  (Iowa)    122  N.  W.  918. 

siCommercial  Nat.  Bank  v.  Zimmerman,  185  N.  Y.  210,  77  N.  E. 
1020;  German  American  Bank  v.  Mills,  99  App.  Div.  312,  91  N.  Y.  Supp. 
142;  Anderson  v.  First  Nat.  Bank  (Iowa)   122  N.  W.  918. 

62Commercial  Nat.  Bank  v.  Zimmerman,  185  N.  Y.  210,  77  N.  E.  1020. 

63German  American  Bank  v.  Mills,  99  App.  Div.  312,  91  N.  Y.  Supp.  142. 

54German  American  Bank  v.  Mills,  99  App.  Div.  312,  91  N.  Y.  Supp.  142. 

55See  ante,  §  9.  Code  Supp.  1902,  §  3060-a  185.  Plover  Sav.  Bank  v. 
Moodie,  135  Iowa,  685,  J 10  N.  W.  29. 


§  189  CHECKS.  25t 

delay.^  It  has  long  been  a  general  rule  that  presentment  of  a 
check  must  be  made  within  a  reasonable  time  after  its  issuance.''' 
The  negotiable  instruments  act  provides  generally  that  in 
determining  what  is  a  reasonable  time  or  an  unreasonable  time, 
regard  is  to  be  had  to  the  nature  of  the  instrument,  the  usage 
of  trade  or  business,  if  any,  with  respect  to  such  instrument,  and 
the  facts  of  the  particular  case.^^    This,  however,  would  not  seem 

6<5Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or.,  Pa., 
Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  186);  Ariz.  (§  3487);  111. 
(§  185);  Kan.  (§  193);  Md.  (§  205);  Mich.  (§  188);  Neb.  (§  185);  N.  Y. 
(§  322);  Ohio  (§  3177w);  R.  I.  (§  194);  Wis.  (§  1684-2). 

Drawer  of  check  must  show  special  injury  by  delay  in  presentment. 
Emery  v.  Hobson,  62  Me.  578;  Cowing  v.  Altman,  79  N.  Y.  167;  Little 
V.  Phenix  Bank,  2  Hill  (N.  Y.)  425.  Also  in  case  of  failure  to  present  for 
payment.  Allen  v.  Kramer,  2  111.  App.  205.  But  see  Ford  v.  McClung, 
5  W.  Va.  156;  First  Nat.  Bank  v.  Miller,  11  Neb.  500,  65  N.  W.  1064, 
holding  that  the  indorser  need  not  show  special  injury.  A  payee  who 
neglects  to  present  a  check  within  a  reasonable  time  must  stand  any  loss 
occasioned  by  his  default.  Greely  v.  Cascade  County,  21  Mont.  580,  57  Pac. 
274. 

Delay  operates  as  a  discharge  only  to  extent  of  loss.  Cox  v.  Citizens' 
State  Bank,  73  Kan.  789,  85  Pac.  762;  Dehoust  v.  Lewis,  128  App.  Div. 
131,  112  N.  Y.  Supp.  559;  Kramer  v.  Grant,  60  Misc.  109,  ill  N.  Y. 
Supp.  709;  Gordon  v.  Levine,  194  Mass.  418,  80  N.  E.  505;  State  Bank  of 
Gothenburg  v.  Carroll,  81  Neb.  484,  116  N.  W.  276.  In  the  absence  of 
a  showing  of  loss,  the  mere  fact  of  forwarding  check  direct  to  drawee 
instead  of  to  collecting  agent  does  not  discharge  indorser.  Citizens'  Bank 
V.  First  Nat.  Bank,  135  Iowa,  605,  113  N.  W.  481.  As  against  an  in- 
dorser, the  fact  that  the  holder  sends  the  check  or  bill  direct  to  the 
drawee  bank  for  payment  instead  of  selecting  an  ind  penaent  agent  'o 
make  demand  for  payment  is  immaterial,  the  indorser  having  suffered 
no  injury  thereby.  So  held  where  check  was  not  paid  by  drawee  bank 
solely  because  the  maker  had  stopped  payment  before  demand  was  made. 
Plover  Sav.  Bank  v.  Moodie,  135  Iowa,  685,  110  N.  W.  29. 

57Bull  v.  First  Nat.  Bank,  14  Fed.  612;  Woodruff  v.  Plant,  41  Conn. 
344;   Mohawk   Bank  v.   Broderick,    10  Wend.    (N.   Y.)    304. 

58Neg.  Inst.  .Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or.,  Pa., 
Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  193);  Ariz.  (§  3489);  111. 
(§  192);  Kan.  (§  4);  Md.  (§  16);  Mich.  (§  2);  Neb.  (§  191);  N.  Y. 
(§  4)  ;  Ohio  (§  3178b)  ;  R.  I.  (§  4)  ;  Wis.  (§  1675). 

Holder  of  check  is  required  to  present  it  for  payment  within  a  reason- 

Opp. — Sel. — 17 


•l^^  PRESENTMENT   FOR   PAYMENT.  §189 

to  lay  down  or  establish  any  new  rule.  The  nature  of  the  instru- 
ment and  the  facts  of  the  particular  case  have  always  been  con- 
sidered in  passing  upon  the  question  of  reasonable  or  unreason- 
able time.  One  of  the  rules  which  has  been  established  is,  that 
where  the  draAver  and  drawee  and  the  payee  are  all  in  the  same 
city  or  town,  a  check,  to  be  presented  within  a  reasonable  time, 
should  be  presented  at  some  time  before  the  close  of  banking 
hours  on  the  day  after  it  is  issued,  and  that  its  circulation  from 
hand  to  hand  will  not  extend  the  time  of  presentment  to  the  detri- 
ment of  the  drawer.59  jf  they  are  not  in  the  same  place  it  is  only 
necessary  that  the  check  be  put  in  course  of  circulation  within 
the  time  otherwise  allowed  by  law.^^  Most  of  the  cases,  however, 
have  been  decided  on  their  own  peculiar  facts,^!  and  in  this  con- 
nection the  usage  of  banks  relating  to  the  presentation  of  checks 

able  time  after  its  issue,  according  to  the  usuages  of  'business  and  the 
circumstances  of  the  case.  Citizens'  Bank  v.  First  Nat.  Bank,  135  Iowa, 
605,  113  N.  W.  481;  Plover  Savings  Bank  v.  Moodie,  135  Iowa,  685,  110 
N.   W.   29. 

59Gordon  v.  Levine,  194  Mass.  418,  80  N.  E.  505;  Cox  v.  Citizens' 
State  Bank,  13  Kan.  789,  85  Pac.  762;  Matlock  v.  Scheuerman  (Or.)  93 
Piac.  823.  Day  following  indorsement.  First  Nat.  Bank  v.  Currie, 
147  Mich.  72,  13  Det.  Leg.  N.  965,  110  N.  W.  499.  Construed  to  mean  that  the 
reasonable  time  ends  with  the  next  day  after  the  date  of  the  check,  or  of  its 
delivery  if  subsequent  to  the  date  (Dehoust  v.  Lewis,  128  App.  Div.  131,  112 
N.  Y.  Supp.  559),  and  the  fact  that  the  payee  indorsed  the  check  to  a  third 
party  does  not  extend  the  time  as  between  the  drawer  and  the  payee 
(Id.).  Presentment,  or  a  forwarding  for  presentment,  must  be  made 
within  twenty-four  hours  after  the  issuance  of  the  check.  Mohawk  Bank 
v.  Broderick,  10  Wend.  (N.  Y.)  304;  Smith  v.  Miller,  43  N.  Y.  171;  School- 
field  v.  Moon,  56  Tenn.  (9  Heisk.)  171;  First  Nat  Bank  v.  Alexander, 
84  N.  C.  30;  Grange  v.  Reigh,  93  Wis.  552,  67  N.  W.  1130. 

eoCox  V.  Citizens'  State  Bank,  7Z  Kan.  789,  85  Pac.  762. 

6iFor  presentments  held  to  have  been  made  with  reasonable  diligence. 
See  Woodrufif  v.  Plant,  41  Conn.  344;  First  Nat.  Bank  v.  Buckhannon 
Bank,  80  Md.  475,  31  Atl.  302,  27  L.  R.  A.  332;  Nebraska  Nat.  Bank  v. 
Logan,  35  Neb.  182,  52  N.  W.  808;  Rosenthal  v.  Ehrlicher,  154  Pa.  396, 
26  Atl.  435;  Lloyd  v.  Osborne,  92  Wis.  93,  65  N.  W.  859.  For  unreason- 
able delay  in  presentment,  see  Anderson  v.  Rodgers,  53  Kan.  542,  36  Pac. 
1067,  27  L.  R.  A.  248;  Anderson  v.  Gill,  79  Md.  312,  29  Atl.  527; 
Holmes  v.  Roe.  62  Mich.  199,  28  N.  W.  864;  Carroll  v.  Sweet,  9  Misc. 
382,  30  N.  Y.  Supp.  204. 


^  ;^90  EXCUSABLE    DELAY.  259 

eor  payment  is  material  and  relevant,^^  independent  of  the  knowl- 
edge or  want  of  knowledge  thereof  on  the  part  of  a  party  indors- 
ing and  negotiating  the  check  or  bill.^^  Tims,  where  checks  were 
forwarded  to  various  banks  in  accordance  with  the  regular  cus- 
tom and  usage  of  the  business,  sufficient  diligence  was  exercised 
to  charge  the  indorser,  though  demand  might  have  been  more 
promptly  made  if  other  and  extraordinary  means  had  been  re- 
sorted to.^* 

§  190.  Delay  in  making  presentment  for  payment  is  excused 
when  the  delay  is  caused  by  circumstances  beyond  the 
control  of  the  holder,  and  not  imputable  to  his  default, 
misconduct  or  negligence.  When  the  cause  of  delay 
ceases  to  operate,  presentment  must  be  made  with  rea- 
sonable diligence. 

Delay  in  making  presentment  is  excused  when  caused  by  cir- 
cumstances beyond  the  control  of  the  holder  and  not  imputable 
to  his  default,  misconduct,  or  negligence.^s     When  the  cause  of 

62Plover  Savings  Bank  v.  Moodie,  L35  Iowa,  685,  110  N.  W.  29. 

«3Plover  Savings  Bank  v.  Moodie,  135  Iowa,  685,  110  N.  W.  29. 

64Plover  Savings  Bank  v.  Moodie,  135  Iowa,  685,  11€  N.  W.  29.  While 
in  this  case  the  checks  were  in  effect  practically  negotiated  to  each  suc- 
ceeding bank,  and  hence  comes  within  the  rule  as  to  presentment  after 
the  last  negotiation,  still  the  opinion  would  lead  one  to  believe  that  the 
same  result  would  have  been  reached  had  the  checks  simply  been  for- 
warded the  succeeding  banks  for  collection.  Id.  Negligence  of  holder 
of  check  in  presenting  it  for  payment  cannot  be  predicated  on  the  fact 
that  check  was  forwarded  by  mail  instead  of  by  messenger.  Citizens 
Bank  V.  First  Nat.  Bank,  135  Iowa,  605,  113  N.  W.  481. 

65Neg    Inst.    Laws    Colo.,    Conn.,    D.    C.    Fla..   Idaho,    Iowa,    Ky.,    La., 
Mass..  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M..  N.  C.  K  D.  Okl    Or     Pa 
Tenn.,  Utah,  Va.,  Wash..  W.  Va.,  Wyo.  (§  81);  Ariz.  (§  3384) ;  111.     §  8     . 
Kan    (§  88);   Md.    (§  100);   Mich.    (§  83);   Neb.    {§  81);   N.   Y.    (§  141); 
Ohio  (§  3173z);  R.  I.  (§  89);  Wis.  (§  1678-11). 

Mistake  of  postal  clerk,  see  Windham  Bank  v.  Norton,  22  Conn.  21. 
Bad  weather,  see  McDonald  v.  Mosher,  23  111.  App.  206;  Barker  v.  Parker, 
33  Mass.  (6  Pick.)  80.  Death  of  holder,  see  Wilson  v.  Semer,  14  Wis 
380.  War.  see  Hardin  v.  Boyce,  59  Barb.  (N.  Y.)  425;  Lane  v.  Bank  of 
West  Tennessee,   56  Tenn.    (9   Heisk.)   419. 


2G0  t>RESfiNTMENT   FOR   PAYMENT.  §191 

delay  ceases  to  operate,  presentment  must  be  made  with  reason- 
able diligenee.^^ 

§  191.    Presentment  for  payment  to  the  acceptor  for  honor  must 
be  made  as  follows: 

1.  If  it  is  to  be  presented  in  the  place  v/here  the  protest 
for  nonpayment  was  made,  it  must  be  presented  not 
later  than  the  day  following  its  maturity ; 

2.  If  it  is  to  be  presented  in  some  other  place  than  the 
place  where  it  was  protested,  then  it  must  be  for- 
warded within  the  time  specified  for  giving  notice  of 
dishonor. 

Presentment  for  payment  to  the  acceptor  for  honor  must  be 
made  as  follows : 

1.  If  it  is  to  be  presented  in  the  place  where  the  protest  for 
nonpayment  was  made,  it  must  be  presented  not  later  than  the 
day  following  its  maturity .^'^ 

2.  If  it  is  to  be  presented  in  some  other  place  than  the  place 
where  it  was  protested,  then  it  must  be  forwarded  within  the 
time  specified  in  the  section  dealing  with  the  notice  of  dishonor.^ 
The  provisions  excusing  delay  in  presentment  apply  where  there 
is  delay  in  making  presentment  to  the  acceptor  for  honor  or  ref- 
eree in  case  of  need.^^ 

66Same   sections    of   negotiable   instruments   laws   as    last   above    cited. 

67Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M..  N.  C,  N.  D.,  Okl.,  Or.,  Pa., 
Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  168);  Ariz.  (§  3471);  111. 
(§  167);  Kan.  (§  175);  Md.  (§  187);  Mich.  (§  170);  Neb.  (§  167);  N.  Y. 
(§  287);  Ohio  (§  3177-E);  R.  I.  (§  176);  Wis.  (§  1681-25). 

ssSubdivision  2,  same  sections  of  negotiable  instruments  laws  as  last 
above  cited. 

The  section  referred  to  in  the  text  is  §  104  for  the  negotiable 
instruments  laws  of  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or.,  Pa., 
Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  and  Wyo.,  but  should  be  section 
112  of  the  Rhode  Island  law,  section  123  of  the  Maryland  law,  section 
175  of  the  New  York  law,  and  section  1678-34  of  the  Wisconsin  law; 
Ariz.    §  3407;    111.    §   103;    Kan.    §  111;    Mich.    §  106;    Neb.    §  103;    Ohio 


^192  PLACE  FOR  PRESENTMENT.  261 

Place. 

§  IM.    Presentment  for  payment  is  made  at  the  proper  place: 

1.  Where  a  place  of  payment  is  specified  in  the  instru- 
ment and  it  is  there  presented; 

2.  Where  no  place  of  payment  is  specified  but  the  ad- 

dress of  the  person  to  make  payment  is  given  in  the 
instrument  and  it  is  there  presented ; 

3.  Where  no  place  of  payment  is  specified  and  no  ad- 

dress is  given  and  the  instrument  is  presented  at 
the  usual  place  of  business  or  residence  of  the  per- 
son to  make  payment; 

4.  In  any  other  case  if  presented  to  the  person  to  make 

payment  wherever  he  can  be  found,  or  if  presented 
at  his  last  known  place  of  business  or  residence. 

Where  a  place  of  presentment  is  specified  in  the  instrument,  it 
must  be  presented  for  payment  there.'^o  The  note  being  payable 
on  demand  at  a  bank  and  before  presentation  the  bank  goes  into 

§  3174v.  The  law  as  first  adopted  in  New  York  has  been  amended  so 
that  the  reference  is  now  section  175  of  that  law.  Laws  1898,  c.  336, 
§  18.     The  sections  referred  to  are  treated  in  §  231  of  this  work. 

89Neg-.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl,  Or.,  Pa., 
Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  169);  Ariz.  (§  3472);  111. 
(§  168);  Kan.  (§  176);  Md.  (§  188);  Mich.  (§  171);  Neb.  (§  168);  N.  Y. 
(§  288);  Ohio  (§  3177f);  R.  I.   (§  177);  Wis.  (§  1681-26). 

The  section  referred  to  in  the  text  §  81  for  the  negotiable  instruments 
laws  of  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La.,  Mass.,  Mo., 
Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or.,  Pa.,  Tenn.. 
Utah,  Va.,  Wash.,  W.  Va.,  and  Wyo.,  but  should  be  section  89  of  the 
Rhode  Island  law,  section  100  of  the  Maryland  law,  section  141  of  the 
New  York  Law,  and  section  1678-11  of  the  Wisconsin  law;  Ariz.  §  3384; 
111.  §  81;  Kan.  §  88;  Mich.  §  83;  Neb.  §  81;  Ohio  §  3173z.  The  law 
as  first  adopted  in  New  York  has  been  amended  so  that  the  reference 
is  now  to  section  141  of  that  law.  Laws  1898,  c.  336,  §  19.  The  sections 
referred  to  are  treated  in  §§  190,  191  of  this  work. 

70Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C.  N.  D.,  Okl.,  Or.,  Pa., 
Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  73);  Ariz.  (§  3376);  111.  (§  73); 


2t,2  PRESENTMENT   FOR   PAYMENT.  §192 

the  hands  of  a  receiver,  presentation  at  the  bank  is  proper,'^  but 
being  a  national  bank,  no  demand  for  payment  need  be  made  on 
the  receiver/2  Where  a  note  is  made  payable  at  a  designated 
branch  office  of  a  corporation,  presentation  at  the  corporation's 
principal  office  is  insufficient.'^^  if  no  place  of  payment  is  desig- 
nated, but  the  address  of  the  person  to  make  payment  is  given 
in  the  instrument,  it  should  be  presented  there.'^*  If  no  place  of 
payment  is  specified,  and  no  address  is  given,  the  instrument 
should  be  presented  at  the  place  of  business  or  residence  of  the 
person  to  make  payment.'^^     In  any  other  case  presentment  is  suffi- 

Kan.  (§  80);  Md.  (§  92);  Mich.  (§  75);  Neb.  (§  7Z);  N.  Y.  (§  133); 
Ohio  (§  3173r);  R.  I.  (§  81);  Wis.  (§  1678-3). 

Bank  of  the  State  v.  Bank  of  Cape  Fear,  35  N.  C.  (13  Ired.  Law)  75; 
Warren  v.  Briscoe,  12  La.  472;  Tovvnsend  v.  Chas.  H.  Heer  Dry  Goods  Co., 
85  Mo.  503;  Ferner  v.  Williams,  37  Barb.  (N.  Y.)  9;  Arnold  v.  Dresser, 
90  Mass.  (8  Allen)  435;  Apperson  v.  Bynum,  45  Tenn.  (5  Cold.)  341; 
Bynum  v.  Apperson,  56  Tenn.  (9  Heisk.)  632.  In  the  absence  of  custom 
authorizing  it,  a  presentment  at  the  office  of  a  loan  and  trust  company 
in  a  particular  city  is  not  a  sufificient  presentment  of  a  note  payable  at 
any  "bank"  in  such  city.  Nash  v.  Brown,  165  Mass.  384,  43  N.  E.  180. 
But  see  statutory  definition  of  "bank"  in  note  32,  chapter  XV.  Where  the 
specified  place  of  payment  is  the  agency  of  a  banking  company  in  a 
particular  city,  a  presentment  there  has  been  sustained,  though  the  agency 
had  been  removed  shortly  before  the  presentment.  Spann  v.  Batlzell, 
1  Fla.  301,  46  Am.  Dec.  346.  So  if  the  bank  where  a  note  is  made  pay- 
able fails  before  the  maturity  of  the  note,  presentment  at  the  old  place 
of  business  is  good.  Central  Bank  v.  Allen,  16  Me.  41.  See,  also,  Rienke 
V.  Wright,  93  Wis.  368,  67  N.  W.  737;  Adams  v.  Leiand,  30  N.  Y.  309. 
On  question  of  diligence  in  presentment  at  place  designated,  see  Farns- 
worth  V.  Mullen,  164  Mass.  112,  41  N.  E.  131. 

7iSchlesinger  v.  Schultz,  110  App.  Div.  356,  96  N.  Y.  Supp.  383. 

72Schlesinger  v.  Schultz,  110  App.  Div.  356,  96  N.  Y.  Supp.  383. 

73  Iron  Clad  Mfg.  Co.  v.  Sackin,  59  Misc.  281,  110  N.  Y.  Supp.  161.  This 
changes  the  law  in  New  York.     See  Brooks  v.  Higley,  11  Hun  (N.  Y.)  235. 

^^Subdivision  2,  same  sections  of  negotiable  instruments  laws  as  last 
above   cited. 

A  holder  who,  within  the  knowledge  of  the  maker,  places  the  latter's 
address  below  his  name  on  the  note,  is  bound  by  a  demand  made  at  such 
place  by  a  subsequent  holder.  Farnsworth  v.  Mullen,  164  Mass.  112, 
41  N.  E.  131. 

75Subdivision  3,  same  sections  of  negotiable  instruments  laws  as  last 
above  cited. 


§  193  MANNER    OF    PRESENTMENT.  283 

cient  if  made  to  the  person  to  make  payment  wherever  ho  can  be 
found,  or  if  made  at  his  last  known  place  of  business  or  residence^* 

Manner. 

§  193.     The  instrument  must  be  exhibited  to  the  person  from 
whom  payment  is  demanded. 

To  render  a  presentment  for  payment  sufficient,  the  instrument 
must  be  exhibited  to  the  person  from  whom  payment  is  demand- 
ed.'^'^  This  rule  has  been  stated  as  follows:  "No  valid  presentment 
and  demand  can  be  made  by  any  person  without  having  the  note 
in  his  possession  at  the  time,  so  that  the  maker  may  receive  it  in 

Estes  V.  Tower,  102  Mass.  65;  Peoples'  Nat.  Bank  v.  Lutterloh,  95 
N.  C.  495  (no  address  given).  Presentment  at  maker's  place  of  business 
without  inquiring  for  his  residence  is  not  sufficient.  Talbot  v.  National 
Bank  of  the  Commonwealth,  129  Mass.  67.  Diligence  where  no  place  is 
specified,  see  Holtz  v.  Boppe,  37  N.  Y.  634;  Mason  v.  Prichard,  56  Tenn. 
(9  Heisk.)   793. 

^eSubdivision  4,  same  sections  of  negotiable  instruments  laws  as  last 
above  cited. 

Demand  made  on  the  maker  w^hile  on  the  street  is  good,  if  he  has  no 
place  of  business,  and  does  not  object  to  the  place  of  demand.  King  v. 
Crowell,  61  Me.  244;  Parker  v.  Kellogg,  158  Mass.  90,  32  N.  E.  1038. 
Place  of  execution  of  instrument  as  proper  place  for  presentment,  see 
Wittkowski  v.  Smith,  84  N.  C.  671;  Hart  v.  Wills,  52  Iowa,  56,  2  N.  W. 
619.  The  maker  is  presumed  to  reside  in  the  state  where  the  note  is  ex- 
ecuted.    Herrick  v.  Baldwin,  17  Minn.  209. 

77Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or.,  Pa., 
Tenn.,  Utah,  Va..  Wash.,  W.  Va.,  Wyo.  (§  74);  Ariz.  (§  3377);  111. 
(§  74);  Kan.  (§  81);  Md.  (§  93);  Mich.  (§  76);  Neb.  (§  74);  N.  Y. 
(§  134);  Ohio  (§  3173s);  R.  L  (§  82);  Wis.  (§  1678-4). 

Musson  v.  Lake,  45  U.  S.  (4  How.)  262,  11  Law.  Ed.  103;  Arnold  v. 
Dresser,  90  Mass.  (8  Allen)  435;  Shaw  v.  Reed,  29  Mass.  (12  Pick.)  132. 
But  see  Whitwell  v.  Johnson,  17  Mass.  449.  Upon  presentation  and  de- 
mand of  payment,  the  maker  can  insist  on  the  exhibition  of  the  note  as 
evidence  of  the  holder's  right  to  collect.  Gilpin  v.  Savage,  60  Misc.  605, 
112  N.  Y.  Supp.  802.  Conditional  refusal  prior  to  a  demand,  accompanied 
by  a  production  of  tbe  instrument,  does  not  constitute  dishonor.  Citi- 
zen's Bank  V.  First  Nat.  Bank,  135  Iowa,  605,  113  N.  W.  -^81. 


264  PRESENTMENT   FOR   PAYMENT.  §  194 

ease  he  pays  the  amount  due,  unless  special  circumstances,  such 
as  the  loss  of  the  note  or  its  destruction,  are  shown  to  excuse  its 
absence.  "'^^  The  right  of  such  person  to  an  actual  exhibition  or 
production  of  the  instrument  may  be  waived  by  failing  to  ask 
for  it,  and  refusing  payment  on  other  grounds.'^^ 


Dispensing  With  and  Waiver  of  Presentment. 

§  194.    Presentment  for  payment  is  dispensed  with: 

1.  Where  after  the  exercise  of  reasonable  diligence 
presentment  as  required  by  this  act  cannot  be 
made ; 

2.  Where  the  drawee  is  a  fictitious  person; 

3.  By  waiver  of  presentment,  express  or  implied. 

§  195.     A  waiver  of  protest  includes  a  waiver  of  presentment. 

Presentment  for  payment  is  dispensed  with  if,  after  the  exer- 
cise of  reasonable  diligence,  presentment  cannot  be  made.^  This 
is  the  case  where  the  person  primarily  liable  cannot  be  found 
after  diligent  search.^^  So,  also,  if  payment  is  stopped  by  the 
drawer,  or  his  funds  are  withdrawn,  presentment  is  not  necessary 

78Arnold  v.  Dresser,  90  Mass.  (8  Allen)  435. 

79Legg  V.  Vinal,  165  Mass.  555,  43  N.  E.  518;  Waring  v.  Betts,  90  Va. 
46,  17  S.  E.  739;  King  v.  Crowell,  61  Me.  244;  Lockwood  v.  Crawford, 
18  Conn.  361;  Gilpin  v.  Savage,  60  Misc.  605,  112  N.  Y.  Supp.  802. 

soNeg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or.,  Pa., 
Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  82);  Ariz.  (§  3385);  111.  (§  82); 
Kan.  (§  89);  Md.  (§  101);  Mich.  (§  84);  Neb.  (§  82);  N.  Y.  (§  142); 
Ohio    (S  3174);   R.    I.    (§  90);   Wis.    (§  1678-12). 

Waring  v.  Betts,  90  Va.  46,  17  S.  E.  739. 

siGalpin  v.  Hard,  3  McCord  (S.  C.)  394;  Adams  v.  Leland,  30  N.  Y. 
309;  Ratcliff  v.  Planters'  Bank,  34  Tenn.  (2  Sneed)  425.  But  mere  failure 
to  find  the  maker  of  a  note  in  the  city  where  it  was  executed  is  not 
a  good  excuse.  Haber  v.  Brown,  101  Cal.  445,  35  Pac.  1035.  Nonresidence 
as  excusing  presentment,  see  Williams  v.  Bank  of  United  States,  27  U.  S. 
(2  Pet.)  96,  7  Law.  Ed.  30;  Moore  v.  Coflfield,  12  N.  C.  (1  Dev.  Law)  247. 


§195  .WAIVER  OF  PRESENTMENT.  265 

to  charge  him.^^  -q^i  ^^q  mere  insolvency  of  the  person  primarily 
liable  will  not  excuse  presentment.^^  Presentment  is  also  dis- 
pensed with  where  the  drawee  is  a  fictitious  person.^ 

Presentment  may  also  be  waived,^^  and  the  waiver  may  be  ex- 
press, by  parol,^^  or  writing,^"  with  full  knowledge  of  the  facts,^  or 
it  may  be  implied,^^  and  such  waiver  may  consist  of  conduct,^  or 
of  acts  and  declarations  of  the  indorser,  calculated  to  mislead  the 
holder,  put  him  off  his  guard,  or  induce  him  to  forbear  taking 
the  necessary  steps  to  charge  such  indorser.^^  Whether  the  acts 
and  declarations  have  such  effect  is  a  question  of  fact.^^ 

The  exceptions  above  noted  are  exclusive.'* 

82Rhett  V.  Poe,  43  U.  S.  (2  How.)  457,  11  Law.  Ed.  167;  Purchase  v. 
Mattison,  13  N.  Y.  Super.  Ct.  (6  Duer)  587. 

83Lee  Bank  v.  Spencer,  47  Mass.  (6  Mete.)  308;  Manning  v.  Lyon, 
70  Hun,  345,  24  N.  Y.  Supp.  265;  Bassenhorst  v.  Vilby,  45  Ohio  St.  333, 
13  N.  E.  75;  Cedar  Falls  Co.  v.  Wallace  Brothers,  83  N.  C.  225. 

^Subdivision  2,  same  sections  of  negotiable  instruments  laws  as  last 
above   cited. 

^^Subdivision  3,  same  sections  of  negotiable  instruments  laws  as  last 
above  cited. 

Robinson  v.  Bamett,  19  Fla.  670.  See,  also,  Stanley  v.  McElrath,  86 
Gal.  4'<9,  25  Pac.  16,  10  L.  R.  A.  545,  where  it  was  held  that  an  indorser 
who  waived  notice  of  nonpayment  after  dishonor,  and  paid  the  note, 
could  recover  from  the  maker. 

sePorter  v.  Kemble,  53  Barb.  (N.  Y.)  467;  Maples  v.  Traders'  Deposit 
Bank,  15  Ky.  Law  Rep.  879. 

s^Portsmouth  Sav.  Bank  v.  Wilson,  5  App.  D.  C.  8;  City  Sav.  Bank  v. 
Hopson,  53  Conn.  453,  5  Atl.  601. 

sSAebi  v.  Bank  of  Evansville,  124  Wis.  73,  102  N.  W.  329. 

89Markland  v.  McDaniel,  51  Kan.  350,  20  L.  R.  A.  96;  Cady  v.  Bradshaw, 
116  N.  Y.  188,  22  N.  E.  371;  Sieger  v.  Second  Nat.  B^nk,  132  Pa.  307,  19 
Atl.  217;  Torbert  v.  Montague,  3S  Colo.  325,  87  Pac,   1145. 

90Baumeister  v.  Kuntz,  53  Fla.  340,  42  So.  886. 

eiTorbcrt  v.  Montague,  38  Colo.  325,  87  Pac.  1145. 

92Torbert  v.  Montague,  38  Colo.  3.?5,  87  Pac.  1145.  Implied  waiver  where 
indorser  was  president  of  corporation  and  participated  in  having  latter 
adjudged  a  bankrupt.  J.  W.  O'Bannon  Co.  v.  Curran  129  App.  Div.  90,  113 
N.  Y.  Supp.  359. 

osMoore  v.  Alexander,  63  App.  Div.  100,  71  N.  Y.  Supp.  420;  J.  W. 
O'Bannon  Co.  v.  Curran,  129  App.  Div.  90,  113  N.  Y.  Supp.  359.  Alters 
New  York  rule  that  failure  to  present  does  not  discharge  in  the  absence 


20b  PRESENTMENT   FOR  PAYMENT.  §  196 

Waiver  of  protest. 

A  waiver  of  protest,  whether  in  the  case  of  a  foreign  bill  of 
exchange  or  other  negotiable  instrument,  is  deemed  to  be  a 
waiver  not  only  of  a  formal  protest,  but  also  of  presentment  and 
notice  of  dishonor,^*  and  it  has  been  held  that  a  waiver  of  ''no- 
tice of  protest"  was  a  waiver  of  protest  and  consequently  of  de- 
mand and  presentment.^* 

Dishonor. 

§  196.    The  instrument  is  dishonored  by  nonpayment  when: 

1.  It  is  duly  presented  for  payment  and  payment  is  re- 

fused or  cannot  be  obtained;  or 

2.  Presentment  is  excused  and  the  instrument  is  over- 
due and  unpaid. 

The  instrument  is  dishonored  by  nonpayment  if  it  is  duly  pre- 
sented for  payrOsCnt,  and  payment  is  refused  or  cannot  be  ob- 
tained, or  presentment  is  excused,  and  the  instrument  is  overdue 
and  unpaid.^^ 

of  injury.  J.  W.  O'Bannon  Co.  v.  Curran,  129  App.  Div.  90,  113  N.  Y. 
Supp.  359.  Lack  of  funds  no  defense.  First  Nat.  Bank  v.  Currie,  147 
Mich.  72,  13  Det.  Leg.  N.  965,  110  N.  W.  499. 

9^N-eg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or.,  Pa., 
Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  111);  Ariz.  (§  3414);  IIll. 
(§  110);  Kan.  (§  118);  Md.  (§  130);  Mich.  (§  113);  Neb.  (§  110);  N.  Y. 
(§  182);  Ohio  (§  3175b);  R.  I.  (§  119);  Wis.  (§  1678-41). 

Bank  of  Montpelier  v.  Montpelier  Lumber  Co.   (Idaho)   102  Pac.  685. 

S5Parr  v.  City  Trust,  Safe  Deposit  &  Surety  Co.,  95  Md.  291,  52  Atl.  512. 

96Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or.,  Pa., 
Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  83);  Ariz.  (§  3386);  111.  (§  83); 
Kan.  (§  90);  Md.  (§  102);  Mich.  (§  85);  Neb.  (§  83);  N.  Y.  (§  143); 
Ohio  (§  3174a);  R.  L  (§  91);  Wis.  (§  1678-13). 


§  198  REFEREE   IN   CASE  OF   NEED.  2G7 

§  197.  Subject  to  the  provisions  of  the  act,  when  the  instrument 
is  dishonored  by  nonpayment,  an  immediate  right  of  re- 
course to  all  parties  secondarily  liable  thereon  accrues 
to  the  holder. 

Subject  to  the  other  provisions  of  the  negotiable  instruments 
laws  as  to  the  liability  of  persons  secondarily  liable  when  an  in- 
strument is  dishonored  by  nonpayment,  an  immediate  right  of 
recourse  against  all  parties  secondarily  liable  thereon  accrues  to 
the  holder.97 

§  198.  The  drawer  of  a  bill  and  any  indorser  may  insert  therein 
the  name  of  a  person  to  whom  the  holder  may  resort  in 
case  of  need,  that  is  to  say,  in  case  the  bill  is  dishonored 
for  nonpayment.  Such  person  is  called  the  referee  in 
case  of  need.  It  is  in  the  option  of  the  holder  to  resort 
to  the  referee  in  case  of  need  or  not  as  he  may  see  fit. 

The  drawer  or  indorser  of  a  bill  may  insert  therein  a  referee 
in  case  of  need  in  case  the  bill  is  dishonored  by  nonpayment.^^  It 
is  optional  with  the  holder  to  resort  to  such  referee,^  but  if  he 
does,  and  the  latter  pays,  he  has  recourse  against  the  drawer  for 
the  full  amount.^*^ 

o^Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or.,  Pa., 
Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  84);  Ariz.  (§  3387);  111. 
(§  84);  Kan.  (§  91);  Md.  (§  103);  Mich.  (§  86);  Neb.  (§  84);  N.  Y. 
(§  144);  Ohio  (§  3174b);  R.  I.  (§  92);  Wis.  (§  1678-14). 

Parties  to  negotiable  instruments  held  to  be  guarantors  and  not  indors- 
ers.  See  Glickauf  v.  Kaufmann,  IZ  111.  378;  Nelson  v.  Harrington,  82 
Mass.  (16  Gray  )  139;  Harding  v.  Waters,  74  Tenn.  (6  Lea)  324.  But  see 
Pollard  V.  Huff,  44  Neb.  892,  63  N.  W.  58.  Cosureties  not  guarantors, 
see  Southerland  v.  Fremont,  107  N.  C.  565,  12  S.  E.  237.  In  case  of  a 
mere  guaranty  of  collection,  the  holder  must  first  pursue  remedies  against 
the  principal  debtor.  Summers  v.  Barrett,  65  Iowa,  292,  21  N.  W.  646; 
Pach  V.  Frink,  10  Iowa,  193. 

98Neg.  Inst.  Lav/s  Colo.,  Conn.,  D.  C.,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont:,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or.,  Pa., 
Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  131):  Ariz.  (§  3434);  111. 
(§  130);  Kan.  (§  138);  Md.  (§  150);  Mich.  (§  133);  N«b.  (§  130);  N.  Y. 
(S  215);  Ohio  (§  3175v);  R.  I.  (§  139);  Wis.  (§  16.S0e). 

y^Same  sections  negotiable  instruments  laws  last  cited. 

lOOChit.  Bills,  186;  Story,  Bills,  §  65. 


CHAPTER  XIII. 

PROTEST  OF  BILLS  OF  EXCHANGE. 


§  199.  Necessity. 

§  200.  Dishonor  of  Bill  by  Acceptor  For  Honor. 

§  201.  Protest  of  Bill  for  Nonacceptance  and  Nonpayment. 

§  202.  Nature  and  Sufficiency  of  Protest. 

§  203.  By  Whom  Made. 

§  204.  Time  of  Making  Protest — Extending  Notes. 

§  205.  Protest  Before  Maturity  Where  Acceptor  is  Insolvent. 

§  206.  Protest  of  Bill  Accepted   For   Honor. 

§  207.  Place  of  Protest. 

§  208.  Protest  of  Lost  or  Detained  Bill. 

§  209.  Waiver. 

§  210.  Excuses  For  Failure  or  Delay  to  Protest. 

§  211.  Damages  Recoverable  in  Case  of  Protest. 


Necessity. 

§  199.  Where  any  negotiable  instrument  has  been  dishonored 
it  may  be  protested  for  nonacceptance  or  nonpayment,  as 
the  case  may  be,  but  protest  is  not  required  except  in 
the  case  of  foreign  bills  of  exchange  appearing  on  their 
face  to  be  such.  Failure  to  protest  such  a  foreign  bill 
discharges  the  drawer  and  indorsers. 

§  200.  When  the  bill  is  dishonored  by  the  acceptor  for  honor, 
it  must  be  protested  for  nonpayment  by  him. 

§  201.  A  bill  which  has  been  protested  for  nonacceptance  may 
be  subsequently  protested  for  nonpayment. 

Foreign  bills  must  be  protested  for  nonacceptance  or  nonpay- 
ment. 

Where  a  foreign  bill  which  shows  on  its  face  that  it  is  snch  is 
dishonored  by  nonacceptance,  it  must  be  duly  protested  for  non- 
268 


§201  NECESSITY.  2Gt) 

aeceptanee;  and  it  must  be  duly  protested  for  nonpayment  if  it 
has  been  dishonored  by  nonpayment,  and  has  not  been  previously 
dishonored  for  nonaceeptance.^/  Negotiable  instruments  other 
than  foreign  bills  may  be,  but  need  not  be,  protested  for  non- 
acceptance  or  nonpayment.^  ■'But  as  the  notarial  certificate  of 
protest  is  generally  made  p"rima  facie  evidence  of  the  facts  of 
dishonor  and  notice  which  it  recites,  it  is  often  convenient  to 
protest  instruments  which  are  not  foreign  bills.  If  a  foreign  bill 
is  not  protested  as  required  by  the  above  rules,  the  drawer  and 
indorscrs  are  discharged.^ 

iNeg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or.,  Pa., 
Tenn.,  Utah,  Va..  Wash.,  W.  Va.,  Wyo.  (§  152);  Ariz.  (§  3455);  111. 
(§  151);  Kan.  (§  159);  Md.  (§  17);  Mich.  (§  154);  Neb.  (§  151);  N.  Y. 
(§  260);   Ohio   (§  3176p);   R.  I.   160);  Wis.   (§  1681-9). 

Amsinck  v.  Rogers,  189  N.  Y.  252,  82  N.  E.  134,  121  Am.  St.  Rep.  858. 

As  to  necessity  of  protesting  dishonored  foreign  bill,  see  Commercial 
Bank  v.  Varnum,  3  Lans.  (N.  Y.)  86,  49  N.  Y.  269;  Gardner  v.  Bank  of  Ten- 
nessee, 31  Tenn.  (1  Swan)  420;  Joseph  v.  Salomon,  19Fla.623;Union  Bank 
V.  Hyde,  19  U.  S.  (6  Wheat.)  572,  5  Law.  Ed.  169.  A  dishonored  inland 
bill  need  not  be  protested.  McCord  v.  Curlee,  59  111.  221;  Townsend  v. 
Auld,  8  Misc.  516,  28  N.  Y.  Supp.  746;  Hubbard  v.  Troy,  24  N.  C.  (2  Ired.) 
134;  Shaw  v.  McNeill,  95  N.  C.  535.  A  dishonored  check  n.eed  not  be 
protested.  Wittich  v.  First  Nat.  Bank,  20  Fla.  843,  51  Am.  Rep.  631; 
Henshaw  v.  Root,  60  Ind.  220;  Wood  River  Bank  v.  First  Nat.  Bank, 
36  Neb.  744,  55  N.  W.  239. 

2Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or.,  Pa., 
Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  118);  Ariz.  (§  3421);  111. 
(§  117);  Kan.  (§  125);  Md.  (§  137);  Mich.  (§  120);  Neb.  (§  117);  N.  Y. 
(§  189);  Ohio  (§  3175i);  R.  I.  (§  126);  Wis.  (§  1678-48). 

Wisner  v.  First  Nat.  Bank,  220  Pa.  21,  68  Atl.  955.  At  common  law 
and  under  the  Massachusetts  statute,  no  formal  protest  is  needed  to 
hold  the  indorsers;  it  is  enough  if  there  has  been  proper  demand  upon 
the  maker,  a  refusal  by  bim  to  make  payment,  and  seasonable  notice  of 
these  facts  given  the  indorser.  Demelman  v.  Brazier,  198  Mass.  458,  84 
N.  E.  856. 

SN'Cg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or.,  Pa., 
Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  152);  Ariz.  (§  3455);  Til. 
(§  151);  Kan.  (§  159);  Md.  (§  171);  Mich.  (§  154);  Neb.  (§  151);  N.  Y. 
(§  260);  Ohio  (§  3176p);  R.  I.  (§  160);  Wis.  (§  1681-9). 


2/U  PROTEST  OF  BILLS  OF  EXCHANGE.  §  202 

Dishonor  of  bill  by  acceptor  for  honor. 

When  the  bill  is  dishonored  by  the  acceptor  for  honor,  it  must 
be  protested  for  nonpayment  by  him.* 

Protest  both  for  nonacceptance  and  nonpayment. 

The  fact  that  a  bill  has  been  protested  for  nonacceptance  will 
not  prevent  a  subsequent  additional  protest  for  nonpayment.^ 

Nature  and  Sufficiency  of  Protest. 

§  202.  The  protest  must  be  annexed  to  the  bill,  or  must  contain 
a  copy  thereof,  and  must  be  under  the  hand  and  seal 
of  the  notary  making  it,  and  must  specify ; 

1.  The  time  and  place  of  presentment ; 

2.  The  fact  that  presentment  was  made  and  the  manner 
thereof ; 

3.  The  cause  or  reason  for  protesting  the  bill; 

4.  The  demand  made  and  the  answer  given,  if  any,  or 
the  fact  that  the  drawee  or  acceptor  could  not  be 
found. 

In  its  broadest  sense,  the  word  "protest"  includes  all  the  steps 
necessary  to  charge  the  indorsers.^     Technically,  however,  the 

*Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or.,  Pa., 
Tcnn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  170);  Ariz.  (§  3473);  III. 
(§  169);  Kan.  (§  177);  Md.  (§  189);  Mich.  (§  172);  Neb.  (§  169);  N.  Y. 
(§  289);  Ohio   (§  2177g);   R.  I.    (§  178);  Wis.   (§  1681-27). 

5Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or.,  Pa., 
Tcnn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  157);  Ariz.  (§  3460);  111. 
(§  156);  Kan.  (§  164);  Md.  (§  176);  Mich.  (§  159);  Neb.  (§  156);  N.  Y. 
(§  265);  Ohio  (§  3176v);  R.  I.  (§  165);  Wis.  (§  1681-14). 

cWhite  V.  Keith,  97  Ala.  668,  12  So.  611;  Ayrault  v.  Pacific  Bank, 
47  N.  Y.  570,  7  Am.  Rep.  489;  Wolford  v.  Andrews,  29  Minn.  250,  13  N.  W. 
167,  43  Am.  Rep.  201;  Townsend  v.  Lorain  Bank,  2  Ohio  St.  345;  Sherman 
V.  Ecker,  59  Misc.  216,  110  N.  Y.  Supp.  265,  rvg.  58  Misc.  456,  109  N.  Y. 
Supp.  678. 


§  202  SUFFICIENCY.  271 

protest  is  a  formal  document  annexed  to  the  bill,  or  eontainint; 
a  copy  of  the  bill,^  under  the  hand  and  seaH  of  the  notary  mak- 
ing it,  and  specifying  the  time  and  place  of  presentment,^  the 
fact  that  presentment  was  made,  and  the  manner  thereof,^"  the 
cause  or  reason  for  protesting  the  bill,^^  the  demand  made  and 
the  answer  given,  if  any,  or  the  fact  that  the  drawee  or  acceptor 
could  not  be  found.^^  ^  notarial  certificate  of  protest  failing  to 
show  in  what  post  office  notice  to  indorser  was  deposited  and  to 
what  post  office  it  was  sent    has  been  held  insufficient.^^ 


7Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or.,  Pa., 
Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  153);  Ariz.  (§  3456);  111. 
(§  152);  Kan.  (§  160);  Md.  (§  172);  Mich.  (§  155);  Neb.  (§  152);  N.  Y. 
(§  261);  Ohio  (§  3176q);  R.  I.  (§  161);  Wis.  (§  1681-10). 

See  Colms  v.  Bank  of  Tennessee,  63  Tenn.  (4  Baxt.)  422,  where  it  was 
held  that  a  failure  to  copy  the  instrument  in  the  foniial  protest  was 
cured  by  prefixing  a  copy,  and  referring  to  such  copy  in  the  protest. 
See,  also,  Townsend  v.  Lorain  Bank,  2  Ohio  St.  345. 

sSame  sections  negotiable  instruments  laws  last  cited. 

See  Jordon  v.  Long,  109  Ala.  414,  19  So.  843;  Richards  v.  Boiler,  51 
How.  (N.  Y.)  371,  6  Daly,  460.  And  see  Bank  of  Cooperstown  v.  Woods, 
28  N.  Y.  561. 

^Subdivision  1,  same  sections  of  negotiable  instruments  laws  as  last 
above  cited. 

Gardner  v.  Bank  of  Tennessee,  31  Tenn.  (1  Swan)  420;  People's  Bank 
V.  Brooke,  31  Md.  7.  See,  also,  Brooke  v.  Higby,  11  Hun  (N.  Y.)  235, 
in  which  it  was  held  that  the  notarial  certificate  failed  to  show  that  the 
draft  was  presented  at  the  place  where  it  was  made  payable. 

lOSubdivision  2,  same  sections  of  negotiable  instruments  laws  as  last 
above  cited. 

A  protest  which  does  not  show  presentation  to  the  drawee  is  not 
admissible  in  evidence  in  an  action  against  an  indorser.  Musson  v. 
Lake,  45  U.  S.  (4  How.)  262,  11  Law.  Ed.  103. 

^Subdivision  3,  same  sections  of  negotiable  instruments  laws  as  last 
above  cited. 

i2Subdivision  4,  same  sections  of  negotiable  instruments  laws  as  last 
above  cited. 

iSMason  v.  Kilcourse,  71  N.  J.  Law,  472,  59  Atl.  21. 


272  PROTEST  OF  BILLS  OF  EXCHANGE.  §  203 

Conclusiveness  of  certificate. 

A  properly  executed  certificate  of  protest  is,  in  most  states, 
prima  facie  evidence  of  the  facts  therein  recited,^*  but  may  be 
contradicted  by  other  evidence,^^  the  question  being  for  the 
jury.^^ 

By  Whom  Made. 


§  203.    Protest  may  be  made  by: 

1.  A  notary  public;  or 

2.  By  any  respectable  resident  of  the  place  where  the 
bill  is  dishonored  in  the  presence  of  two  or  more 
credible  witnesses. 

Protest  of  a  bill  may,  of  course,  be  made  by  a  notary,^'^  and  it  is 
customary  to  have  a  notary  make  the  protest,  but  it  may  also 

i*See  Martin  v.  Brown,  75  Ala.  442;  Ricketts  v.  Pendleton,  14  Md.  320; 
Legg  V.  Vinal,  165  Mass.  555,  43  N.  E.  518;  Bettis  v.  Schrieber,  31  Minn. 
329,  17  N.  W.  863;  McAndrew  v.  Radway,  34  N.  Y.  511;  Rosson  v.  Carroll, 
6  Pjckle,  90;  Central  Bank  v.  St.  John,  17  Wis.  157.  See,  also,  Sims  v. 
Hundley,  47  U.  S.  (6  How.)  1,  12  Law.  Ed.  580.  Certificate  of  protest 
stating  that  indorser  was  duly  notified  of  dishonor,  the  indorser  has  the 
burden  of  showing  that  he  did  not  receive  notice.  Zollner  v.  Moffitt, 
222  Pa.  644,  72  Atl.  285. 

i5Meise  v.  Newman,  76  Hun,  341,  27  N.  Y.  Supp.  708;  Adams  v.  Wright, 
14  Wis.  408;  Demelman  v.  Brazier,  198  Mass.  458,  84  N.  E.  856. 
iSDemelman  v.  Brazier,  198  Mass.  458,  84  N.  E.  856. 
i7Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl  Or.,  Pa., 
Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  154);  Ariz.  (§  3457);  111. 
(§  153);  Kan.  (§  161);  Md.  (§  173);  Mich.  (§  156);  Neb.  (§  153);  N.  Y. 
(§  262);  Ohio   (§  3176r);  R.  I.   (§  162);  Wis.  (§  1681-11). 

Protest  may  be  made  by  the  notary's  clerk,  if  that  is  the  custom  at 
the  place  of  protest.  Commercial  Bank  of  Kentucky  v.  Varnum,  49  N.  Y. 
269;  Munroe  v.  Woodruff,  17  Md.  159;  Sussex  Bank  v.  Baldwin,  17  N.  J. 
Law,  487.  In  the  absence  of  well  defined  custom,  the  notary's  clerk  or 
deputy  cannot  make  the  protest  for  hitn.  Cribbs  v.  Adams,  19  Mass. 
(13  Grsy)  597;  OnondaRa  Bank  v.  Bates.  3  Hill  CN.  Y.)  S3. 


§  206  TIME.  273 

be  made  by  any  respectable  resident  of  the  place  where  the  bill 
is  dishonored,  in  the  presence  of  two  or  more  credible  witucsses.^^ 
By  the  law  merchant,  a  notarial  protest  need  not  be  made  in 
the  presence  of  witnesses.^^ 

TiMB  OP  Protest. 

§  204.  When  a  bill  is  protested,  such  protest  must  be  made  on 
the  day  of  its  dishonor,  unless  delay  is  excused.  When 
the  bill  has  been  duly  noted,  the  protest  may  be  subse- 
quently extended  as  of  the  date  of  the  noting. 

§  205.  Where  the  acceptor  has  been  adjudged  a  bankrupt  or  an 
insolvent,  or  has  made  an  assignment  for  the  benefit  of 
creditors,  before  the  bill  matures,  the  holder  may  cause 
the  bill  to  be  protested  for  better  security  against  the 
drawer  and  indorsers. 

§  206.  Where  a  dishonored  bill  has  been  accepted  for  honor 
supra  protest,  or  contains  a  reference  in  case  of  need,  it 
must  be  protested  for  nonpayment  before  it  is  presented 
for  payment  to  the  acceptor  for  honor  or  referee  in  case 
of  need. 

Time  of  making  protest — Extending  notes. 

Protest  must  be  made  on  the  day  the  bill  is  dishonored,  unless 
protest  is  excused.?"     The  notary  need  not,  however,  make  out 

isSame  sections  of  negotiable  instruments  laws  as  last  above  cited. 

This  provision  is  taken  from  the  English  Bills  of  Exchange  Act  1882 
(§  45). 

i9Bradford  v.  Cooper,  1  La.  Ann.  325. 

20Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or.,  Pa., 
Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  155);  Ariz.  (§  3458);  111. 
(§  154);  Kan.  (§  162);  Md.  (§  174);  Mich.  (§  157);  Neb.  (§  154);  N.  Y. 
.(§  263);  Ohio  (§  3176s);  R.  I.  (§  163);  Wis.  (§  1681-12). 

Commercial  Bank  of  Kentucky  v.  Barksdale,  36  Mo.  563.  A  certificate 
of  protest  made  four  and  one-half  years  after  protest  is  not  proof  of  notice 
of  dishonor.     Boggs  v.  Branch  Bank  at  Mobile,  10  Ala.  970. 

Opp. — Sel. — 18 


274  PROTEST  OF  BILLS  OF  EXCHANGE.  §  206 

the  formal  protest  at  that  time.  He  may  make  a  note  of  the  facts, 
and  draw  up  or  extend  his  formal  protest  afterwards.^^  The 
rule  has  been  stated  as  follows:  ''It  seems  to  be  clearly  estab- 
lished by  the  general  current  of  authority  that  the  protest  must 
he  made  on  the  same  day  with  the  presentment  and  demand, 
though  a  noting  of  the  protest  on  the  bill  itself  may  be  regarded 
as  an  incipient  step  toward  a  protest  which  may  be  completed 
afterwards,  at  any  time,  by  drawing  up  the  protest  in  form."  22 
This  formal  protest  or  extension  of  the  original  noting  takes  date 
as  of  the  date  of  the  noting.^^  In  order  that  delay  may  defeat 
recovery  by  a  bona  fide  holder,  tlie  drawer  must  show  that  he 
suffered  loss  thereby.^* 

Protest  before  maturity  where  acceptor  is  insolvent. 

The  holder  of  a  bill  may  cause  it  to  be  protested  before  ma- 
turity for  better  security  against  the  drawer  and  indorsers,  if, 
before  the  maturity  of  the  bill,  the  acceptor  has  been  adjudged 
a  bankrupt  or  an  insolvent,  or  has  made  an  assignment  for  the 
benefit  of  creditors.^^ 

Protest  of  bill  accepted  for  honor. 

"Where  a  dishonored  bill  has  been  accepted  for  honor  supra 
protest,  or  contains  a  reference  in  case  of  need,  it  must  be  pro- 

MBaHey  v.  Dozier,  47  U.  S.  (6  How.)  23,  12  Law.  Ed.  587;  First  Nat. 
Bank  v.  Crittenden,  2  Thomp.  &  C.  (N.  Y.)  118. 

22Comniercial  Bank  of  Kentucky  v.  Barksdale,  36  Mo.  563. 

23Same  sections  of  negotiable  instruments  laws  as  last  above  cited. 

See  Chatham  Bank  v.  Allison,  15  Iowa,  357;  Union  Bank  v.  Holcomb, 
24  Tenn.   (5  Humph.)   583. 

2<Cox  V.  Citizens'  State  Bank,  73  Kan.  789,  85  Pac.  762,  4  L.  R.  A.  (N.  S.) 
347. 

25Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or.,  Pa., 
Tenn.,  Utah,  Va.,  Wa^h.,  W.  Va.,  Wyo.  (§  158);  Ariz.  (§  3461);  111. 
(§  157);  Kan.  (§  165);  Md.  (§  177);  Mich.  (§  160);  Neb.  (§  157);  N.  Y. 
(§  266);  Ohio  (§  3176v);  R.  I.  (§  166);  Wis.  (§  1681-15). 


§  208  LOST   OR   DETAINED  BILLS.  275 

tested  for  nonpayment  before  it  is  presented  for  payment  to  the 
acceptor  for  honor  or  referee  in  case  of  need.^* 

Place  op  Protest. 

§  207.  A  bill  must  be  protested  at  the  place  where  it  is  dishon- 
ored, except  that  when  a  bill  drawn  payable  at  the  place 
of  business,  or  residence  of  some  person  other  than  the 
drawee,  has  been  dishonored  by  nonacceptance,  it  must 
be  protested  for  nonpayment  at  the  place  where  it  is  ex- 
pressed to  be  payable,  and  no  further  presentment  for 
payment  to,  or  demand  on,  the  drawee  is  necessary. 

Ordinarily,  a  bill  must  be  protested  at  the  place  where  it  is  dis- 
honored ;  -'  but  where  a  bill  is  drawn  payable  at  the  place  of  busi- 
ness or  residence  of  a  person  other  than  the  drawee,  and  has 
been  dishonored  by  nonacceptance,  it  must  be  protested  for  non- 
payment at  the  place  where  it  is  expressed  to  be  payable,  and 
no  further  presentment  for  payment  to,  or  demand  on,  the  drawee 
is  necessary .2^ 

Protest  of  Lost  or  Detained  Bill. 

§  208.  Where  a  bill  is  lost  or  destroyed  or  is  wrongly  detained 
from  the  person  entitled  to  hold  it,  protest  may  be  made 
on  a  copy  or  written  particulars  thereof. 

Where  a  bill  is  lost  or  destroyed,  or  wrongly  detained  from 

26Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl,  Or..  Pa., 
Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  167);  Ariz.  (§  3470);  111. 
(§  166);  Kan.  (§  174);  Md.  (§  186);  Mich.  (§  169);  Neb.  (§  166);  N.  Y. 
(§  286);   Ohio   (§  3177d);   R.   L   (§  175);   Wis.   (§  1681-24). 

27Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C.  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or.,  Pa., 
Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  156);  Ariz.  (§  3459);  111. 
(§  155);  Kan.  (§  163);  Md.  (§  175);  Mich.  (§  158);  Neb.  (§  155);  N.  Y. 
(§  264);  Ohio  (§  3176t);  R.  I.  (§  164);  Wis.  (§  1681-13). 

28Same  sections  of  negotiable  instruments  laws  as  last  above  cited. 


276  PROTEST  OF  BILLS  OF  EXCHANGE.  §  209 

the  person  entitled  to  hold  it,  protest  may  be  made  on  a  copy 
or  written  particulars  thereof.^^ 

Waiver. 


§  209.    Protest  may  be  waived. 

Protest  may  be  waived  by  the  indorsers  or  other  parties  sec- 
ondarily liable,^"  even  after  expiration  of  proper  time  for  the 
protest  to  be  made,^^  and  a  waiver  of  protest  is  deemed  to  be  a 
waiver  of  presentment  and  notice  of  dishonor.^^    ^  j^g^  consid- 

29Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C.,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl,  Or.,  Pa., 
Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  160);  Ariz.  (§  3463);  111. 
(§  159):  Kan.  (§  167);  Md.  (§  179);  Mich.  (§  162);  Neb.  (§  159);  N.  Y. 
(§  268);  Ohio  (§  3176x);  R.  I.  (§  168);  Wis.  (§  1681-17). 

This  is  section  51,  subd.  8,  of  the  English  Bills  of  Exchange  Act  1882. 
See  Hinsdale  v.  Miles,  5  Conn.  331,  where  it  was  held  that  presentment 
of  copy  of  lost  note  and  notice  of  dishonor  was  sufficient,  and  Scott  v. 
Meeker,  20  Hun  (N.  Y.)  161,  where  it  was  held  that  the  accidental 
destruction  of  a  check  by  fire  excused  presentment  for  payment.  As 
to  the  necessity  of  indemnity  against  subsequent  presentation  of  lost 
paper  by  a  bona  fide  holder,  see  McGregory  v.  McGregory,  107  Mass. 
543,  and  Armstrong  v.  Lewis,  14  Minn.  406,  where  it  was  held  that  a 
receiver  suing  on  a  note  must  produce  it,  or  prove  it  to  have  been  lost 
or  destroyed,  and  give  bond  accordingly. 

30Mauney  v.  Coit,  80  N.  C.  300.  It  may  be  waived  by  one  partner. 
Seldner  v.  Mt.  Jackson  Nat.  Bank,  66  Md.  488,  8  Atl.  262,  59  Am.  Rep.  190. 
One  becoming  a  partner  to  paper  containing  a  waiver  written  in  by 
the  maker  is  bound  thereby.  Iowa  Val.  State  Bank  v.  Sigstad,  96  Iowa, 
491,  65  N.  W.  407;  Hoover  v.  McCormick,  84  Wis.  215,  54  N.  W.  505. 
The  last  cited  case  also  holds  that,  by  waiving  demand  and  notice,  an 
indorser  promises  to  pay  absolutely  if  the  maker  does  not.  Indorsers 
waive  protest  of  destroyed  note  by  stating  that  payment  will  be  made, 
after  being  informed  of  the  destruction.  Roch  v.  London,  24  Misc. 
384,  53  N.  Y.  Supp.  261. 

siBurgettstown  Nat.  Bank  v.  Nill,  213  Pa.  456,  63  Atl.  186,  110  Am. 
St.  Rep.  554,  3  L.  R.  A.  (N.  S.)  1079. 

32Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or.,  Pa., 
Tenn..    Utnh,    Va.,    Wash.,    W.    Va.,    Wyo.    (§  111);    Ariz.    (§  3414);    111. 


§210  EXCUSABLE    DELAY.  277 

eration  is  not  necessary  for  a  waiver  of  protest,^'  but  the  weight 
of  authority  requires  that  the  waiver  should  be  in  writing.^* 


Excuses  for  Failure  or  Delay  to  Protest. 

§  210.  Protest  is  dispensed  with  by  any  circumstances  which 
would  dispense  with  notice  of  dishonor.  Delay  in  not- 
ing or  protesting  is  excused  when  delay  is  caused  by  cir- 
cumstances beyond  the  control  of  the  holder  and  not  im- 
putable to  his  default,  misconduct,  or  negligence.  When 
the  cause  of  delay  ceases  to  operate,  the  bill  must  be 
noted  or  protested  with  reasonable  diligence. 

It  is  a  general  rule  that  protest  is  dispensed  with  by  any  cir- 
cumstances which  would  dispense  with  notice  of  dishonor,^^  This 
rule  applies  to  any  delay  caused  by  circumstances  beyond  the 

(§  110);  Kan.  (§  118);  Md.  (§  130);  Mich.  (§  113);  Neb.  (§  110);  N.  Y. 
(§  182);  Ohio  (§  3175b);  R.  I.  (§  119);  Wis.  (§  1678-41). 

The  rule  is  also  recognized  in  the  following  cases:  Union  Bank  v. 
Hyde,  19  U.  S.  (6  Wheat.)  572,  5  Law.  Ed.  169;  Shaw  v.  McNeill,  95 
N.  C.  535;  Wilkie  v.  Chandon,  1  Wash.  355;  Johnson  v.  Parsons,  140  Mass. 
173,  4  N.  E.  196,  where  the  words  used  were  "hereby  waive  protest," 
and  it  did  not  appear  that  the  protest  was  necessary  to  hold  the  indorser 
making  the  waiver.  In  Cooke  v.  Pomeroy,  65  Conn.  466,  32  Atl.  935, 
it  was  held  that  an  indorser  expressly  waiving  n-otice  of  protest  was 
liable,  though  demand  was  not  made  on  the  maker,  nor  notice  given, 
for  14  years  after  delivery  of  the  note. 

ssRobinson  v.  Barnett,  19  Fla.  670,  45  Am.  Rep.  24;  Burgettstown  Nat. 
Bank  V.  Nill,  213  Pa.  456,  63  Atl.  186,  110  Am.  St.  Rep.  554,  3  L.  R.  A. 
(N.  S.)  1079. 

34Farwell  v.  St.  Paul  Trust  Co.,  45  Minn.  495,  48  N.  W.  326,  22  Am.  St. 
Rep.  742,  and  cases  cited.  But  see  Boyd  v.  Cleveland,  21  Mass.  (4  Pick.) 
525.  As  to  what  expressions  amount  to  express  written  waiver,  see 
Savings  Bank  v.  Fisher  (Cal.)  41  Pac.  490;  Portsmouth  Sav.  Bank  v. 
Wilson,  5  App.  D.  C.  8. 

35Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or.,  Pa., 
Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  159);  Ariz.  (§  3462);  111. 
(§  158);  Kan.  (§  166);  Md.  (§  178);  Mich.  (§  161);  Neb.  (§  158);  N.  Y. 
(§  267);  Ohio  (§  3176w);  R.  L  (§  167);  Wis.  (§  1681-16). 


278  PROTEST  OF  BILLS  OF  EXCHANGE.  §  211 

control  of  the  holder,  and  not  imputable  to  his  default,  miscon- 
duct, or  negligence,  but  the  bill  must  in  every  case  be  protested 
within  a  reasonable  time  after  the  cause  of  delay  ceases  to  op- 
erate.^^  A  state  of  war  rendering  protest  impossible  would  ex- 
cuse a  failure  to  protest,^'''  but  protest  must  be  made  within  a 
reasonable  time  after  the  close  of  the  war,  and  the  resumption  of 
commercial  relations.^^  Protest  is  also  excused  if  the  drawer  has 
instructed  the  drawee  not  to  pay,^^  or,  after  issuing  the  bill  or 
order,  has  withdrawn  or  intercepted  the  funds  out  of  which  it 
was  to  have  been  paid>*^ 


Damages  Recoverable  in  Case  of  Protest. 

§  211.    In  some  states  damages  are  recoverable  in  case  of  protest. 

"While  ordinarily  protest  fees  are  recoverable  in  a  suit  on  the 
note  on  the  common  counts,*^  still  the  majority  of  the  negotiable 
instruments  laws  do  not  provide  for  the  damages  recoverable  in 
case  of  protest;  but  the  "Wisconsin  law  provides  that  where  any 
bill  of  exchange  drawn  or  indorsed  within  the  state,  and  payable 
without  th-G  limits  of  the  United  States,  shall  be  duly  protested  for 
nonacceptance  or  nonpayment,  the  party  liable  for  the  contents 
of  such  bill  shall,  on  due  notice  and  demand  thereof,  pay  the 

seSame  sections  of  negotiable  instruments  laws  as  last  above  cited. 

For  provisions  of  charter  of  Greater  New  York  as  to  presentment  and 
protest  of  commercial  paper  during  an  epidemic  in  city,  see  ante,  chapter 
Vn,  note  29. 

37House  V.  Adams,  48  Pa.  St.  261,  86  Am.  Dec.  588.  And  see  Peters 
V.  Hobbs,  25  Ark.  67,  91  Am.  Dec.  529;  Bynum  v.  Apperson,  56  Tenn. 
(9  Heisk.)  632.     But  see  United  States  v.  Barker,  Fed.   Gas.  No.   14,519. 

38James  v.  Wade,  21  La.  Ann.  548;  Lane  v.  Bank  of  West  Tennessee, 
56  Tenn.  (9  Heisk.)  419. 

39Neederer  v.  Barber,  Fed.  Gas.  No.  10,079;  Manning  v.  Maroney, 
87  Ala.  563,  6  So.  343,  13  Am.  St.  Rep.  67.  See,  also,  Ghild  v.  Moore, 
6  N.  H.  93. 

40See  Rhett  v.  Poe,  43  U.  S.  (2  How.)  457,  11  Law.  Ed.  167;  Lilley 
V.   Miller,  2  Nott    &  McG.    (S.  G.)   257. 

"First  Nat.  Bank  of  El  Paso  v.  Miller,  235  111.  135,  85  N.  E.  312. 


§  211  DAMAGES.  279 

same  at  the  current  rate  of  exchange  at  the  time  of  demand,  and 
damages  at  the  rate  of  five  per  cent  upon  the  contents  thereof, 
together  with  the  interest  on  said  contents,  to  be  computed  from 
the  date  of  the  protest,  and  that  said  amounts  shall  be  in  full  of 
all  damages,  charges,  and  expenses.**  The  Wisconsin  law  further 
provides  that  if  any  bill  of  exchange  drawn  upon  any  person 
or  corporation  out  of  the  state,  but  within  some  state  or  territory 
of  the  United  States,  shall  be  duly  protested  for  nonacceptance 
or  nonpayment,  the  drawer  or  indorser  thereof,  after  due  notice, 
''shall  pay  said  bill,  with  legal  interest,  according  to  its  tenor, 
and  five  per  cent  damages,  together  with  costs  and  charges  of 
protest. ' '  *3 

^Negotiable  Inst.  Law,  §  1682. 

*3Negotiable  Inst.  Law,  §  1683. 

In  the  states,  other  than  Wisconsin,  that  have  adopted  the  negotiable 
instruments  law,  the  matter  of  damages  on  protest  is  regulated  by  other 
statutes.  Colorado,  Mills  Ann.  St.  §§  241,  242;  Connecticut,  Gen.  St. 
1864;  District  of  Columbia,  Comp.  St.  c.  8,  §§  11,  13;  Maryland,  Pub. 
Gen.  Laws,  art.  13,  §§  1,  4;  Massachusetts,  Pub.  St.  c.  11,  §§  18,  20,  21; 
New  York,  1  Rev.  St.  p.  770,  §§  18,  23;  North  Carolina,  Code,  §  48; 
North  Dakota,  Rev.  Code,  §§  4956,  4957;  Oregon,  Hills  Ann.  Laws, 
§§  3195,  3196;  Rhode  Island,  Pub.  St.  c.  166,  §§  1,  3;  Tennessee,  Code, 
§§  3512,  3513;  Virginia,  Code,  §  2851. 


CHAPTER  XIV. 

NOTICE  OF  DISHONOR. 

§  212.  Necessity. 

§  213.  When  Need  Not  be  Given  Drawer. 

§  214.  When  Need  Not  be  Given  Indorser. 

§  215.  By  Whom  Given. 

§  216.  May  be  Given  by  Agent. 

§  217.  Notice  Where  Instrument  is  in  Agent's  Hands. 

§  218.  Parties  Protected — Notice  Given  by  or  on  Behalf  of  Holder. 

5  219.  Same — Notice  Given  by  or  on  Behalf  of  Party  Entitled  to  Give 

Notice. 

§  220.  To  Whom  Given. 

§  221.  When  Parties  Are  Dead. 

i  222.  When  Parties  are  Partners. 

}  223.  Joint  Parties  Not  Partners. 

^  224.  Notice  to  Bankrupt  or  Insolvent. 

^  225.  Form  and  Requisites. 

5  226.  Sufficiency  of  Terms  and  Effect  of  Misdescription. 

5  227.  How  Given. 

J  228.  By  Mail. 

a  229.  Time  Within  Which  Notice  Must  Be  Given. 

§  230.  Parties  Residing  in  the  Same  Place. 

§  231.  Parties   Residing  in   Different  Places. 

§  232.  Notice  to  Antecedent  Party. 

§  233.  Notice  to  Principal  by  Agent. 

§  234.  Place  Where  Notice  Must  be  Sent. 

§  235.  Actual   Receipt  Sufficient. 

§  236.  Dispensing  With  Notice. 

^  237.  Instruments  Dishonored  by  NonacceptancCv 

§  238.  Waiver  of  Notice. 

§  239.  Waiver  of  Protest. 

§  240.  Parties  Affected  by  Waiver. 

§  241.  Excusable  Delay. 

§  242.  Effect  of  Omission  to  Give  Notice. 

280 


^  212  NECESSITY.  281 

Necessity. 

§  212.  Except  as  herein  otherwise  stated,  when  a  negotiable  in- 
strument has  been  dishonored  by  nonacceptance  or  non- 
payment, notice  of  dishonor  must  be  given  to  the  drawer 
and  to  each  indorser,  and  any  drawer  or  indorser  to 
whom  such  notice  is  not  given  is  discharged. 

As  a  general  rule,  where  a  negotiable  instrument  has  been  dis- 
honored by  nonacceptance  or  nonpayment,  notice  of  dishonor 
must  be  given  to  the  drawer  and  to  each  indorser,^  and  any  drawer 
or  indorser  to  whom  such  notice  is  not  given  is  discharged.^  The 
fact  that  the  holder  is  excused  from  presenting  the  note  for  pay- 
ment does  not  relieve  him  from  the  duty  of  giving  notice  of  dis- 
honor if  he  wishes  to  hold  an  indorser.^  The  burden  of  proving 
that  due  notice  was  given  is  on  the  holder.* 

'  iNeg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Old.,  Or.,  Pa., 
Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  89);  Ariz.  (§  3392);  111. 
(§  88);  Kan.  (§  96);  Md.  (§  108);  Mich.  (§  91);  Neb.  (§  88);  N.  Y. 
(§  160);  Ohio  (§  3174g);  R.  I.  (§  97);  Wis.  (§  1678-19). 

Bank  of  Vergennes  v.  Cameron,  7  Barb.  (N.  Y.)  143;  Long  v.  Stephen- 
son, 72  N.   C.  569. 

2Same  sections  of  negotiable  instruments  laws  as  last  above  cited. 
■  Allen  V.  Eldred,  50  Wis.  132,  6  N.  W.  565;  Smith  v.  Miller,  43  N.  Y. 
171,  3  Am.  Rep.  690.  Drawer.  Bacigalupo  v.  Parrilli,  112  N.  Y.  Supp. 
1040.  Indorsers.  Deahy  v.  Cloquet,  28  R.  I.  338,  67  Atl.  421,  14  L.  R.  A. 
(N.  S.)  847;  Rockfield  v.  First  Nat.  Bank,  11  Ohio  St.  311,  83  N.  E. 
392,  14  L.  R.  A.  (N.  S.)  842;  J.  W.  Perry  Co.  v.  Taylor  Bros.,  148  N.  C. 
362,  62  S.  E.  423;  Moore  v.  Alexander,  63  App.  Div.  100,  71  N.  Y.  Supp. 
420;  Guttman  v.  Abbott,  110  N.  Y.  Supp.  376;  Galbraith  v.  Shcpard, 
43  Wash.  698,  86  Pac.  1113;  First  Nat.  Bank  v.  Currie,  147  Mich.  72,  13 
Det.  Leg.  N.  965,  110  N.  W.  499,  118  Am.  St.  Rep.  537,  9  L.  R.  A.  (N.  S.) 
1698;  Baumeister  v.  Kuntz,  53  Fla.  340,  42  So.  886. 

Complaint  must  allege  notice  or  excuse.  Ewald  v.  Faulhaber  Stable 
Co.,  55  Misc.  275,  105  N.  Y.  Supp.  114. 

SReed  v.  Spear,  107  App.  Div.  144,  94  N.  Y.  Supp.  1007. 

4In  the  absence  of  proof  of  notice  of  dishonor  given  drawer,  judgment 
for  plaintiff  cannot  be  sustained.  Kuflick  v.  Glasser,  114  N.  Y.  Supp. 
870.  The  indorser  alleging  in  his  answer  that  no  notice  of  dishonor 
was  given,   the  burden  is  on  the  holder  to   show  that   due   notice  was 


282  NOTICE  OF  DISHONOR.  §213 

Same — Notice  to  guarantor  or  surety. 

As  to  the  right  of  a  guarantor  to  notice,  it  has  been  said,  after 
a  careful  review  of  the  authorities:  "We  conclude  the  rule  to 
be  that  a  guarantor  (whose  indorsement  is  not  in  blank),  who  is 
not  a  party  to  the  note,  is  liable  at  the  suit  of  the  payee,  with- 
out any  proof  of  demand  and  notice  of  nonpayment,  or  use  of 
diligence  against  the  maker.  If,  however,  in  an  action  by  the 
payee  against  the  guarantor,  the  guarantor  can  show  affirma- 
tively that  he  has  sustained  damages  from  the  want  of  such  no- 
tice or  diligence,  he  has  a  right  to  make  such  showing  as  a  de- 
fense pro  tanto  to  the  plaintiff's  action. "^  The  court  in  that 
case  also  deduces  the  following  conclusion  from  the  opinion  of 
the  court  in  an  early  case:  "That,  where  the  maker  of  a  note 
is  solvent  at  its  maturity,  notice  of  nonpayment  should  be  given 
to  the  guarantor,  and  that  the  latter,  under  such  circumstances, 
may  avail  himself  of  the  want  of  notice  of  nonpayment;  but  it 
places  the  burden  of  proving  solvency  and  of  injury  from  want 
of  notice  upon  the  guarantor."^ 

In  a  case  arising  under  the  negotiable  instruments  act,  a  surety 
was  held  not  discharged  by  failure  to  give  him  notice.'^ 

When  Notice  Need  Not  be  Given  Drawee. 

§  213.    Notice  of  dishonor  is  not  required  to  be  given  to  the 
drawer  in  either  of  the  following  cases : 

given.  Fuller  Buggy  Co.  v.  Waldron,  112  App.  Div.  814,  99  N.  Y.  Supp. 
561. 

sSabin  v.  Harris,  12  Iowa,  87.  See,  also,  Heaton  v.  Hulbert,  3  Scam. 
(111.)  489.  Where  the  guaranty  of  a  note  is  absolute,  no  demand  or 
exhaustion  of  the  maker  is  required,  nor  any  notice  required  of  accept- 
ance or  default.  Elgin  City  Banking  Co.  v.  Hall  (Tenn.)  108  S.  W. 
1068.  Whether  the  guaranty  of  a  note  stipulates  that  the  maker  will 
pay,  or  whether  it  stipulates  that  the  guarantor  will  pay,  the  undertaking 
is  absolute,  whether  the  maker  is  solvent  or  not,  and  the  guarantor 
may  pay  or  see  that  it  is  paid.  Id. 

6Gibbs  V.  Cannon,  9  Serg.  &  R.  (Pa.)   198,  11  Am.  Dec.  699. 

7Rouse  V.  Wooten,  140  N.  C.  557,  53  S.  E.  430,  111  Am.  St.  Rep.  875. 


§213  NECESSITY  AS  TO  DRAWER.  283 

1.  When  the  drawer  and  drawee  are  the  same  person; 

2.  When  the  drawee  is  a  fictitious  person  or  a  person 
not  having  capacity  to  contract; 

3.  When  the  drawer  is  the  person  to  whom  the  instru- 
ment is  presented  for  payment ; 

4.  Where  the  drawer  has  no  right  to  expect  or  require 
that  the  drawee  or  acceptor  will  honor  the  instru- 
ment; 

5.  Where  the  drawer  has  countermanded  payment. 

Notice  of  dishonor  need  not  be  given  to  the  drawer  in  the  fol- 
lowing cases:  Where  the  drawer  and  the  drawee  is  the  same 
person ;  ^  where  the  drawee  is  a  fictitious  person,  or  a  person  not 
having  capacity  to  contract ;  ^  where  the  drawer  is  the  person  to 
whom  the  instrument  is  presented  for  payment ;  ^°  where  the 
drawer  has  no  right  to  expect  or  require  that  the  drawee  or  ac- 
ceptor will  honor  the  instrument ;  ^^  and  where  the  drawer  has 
countermanded  payment.^^ 

8Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or.,  Pa., 
Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  114);  Ariz.  (§  3417);  111. 
(§  113);  Kan.  (§  121);  Md.  (§  133);  Mich.  (§  116);  Neb.  (§  113);  N.  Y. 
(§  185);  Ohio  (§  3175e);  R.  I.  (§  122);  Wis.  (§  1678-44). 

Fairchild  v.  Ogdensburgh,  C.  &  R.  Co.,  IS  N.  Y.  337,  69  Am.  Dec.  606; 
Chicago,  C.  &  L.  R.  Co.  v.  West,  37  Ind.  211. 

^Subdivision  2  of  same  sections  of  negotiable  instruments  laws  as  last 
above  cited. 

^^Subdivision  3,  same  sections  of  negotiable  instruments  laws  as  last 
above  cited. 

Adler  v.  Levinson,  65  Misc.  514,  120  N.  Y.  Supp.  67. 

^Subdivision  4,  same  sections  of  negotiable  instruments  laws  as  last 
above  cited. 

As  where  drawer  has  no  funds  in  hands  of  drawee.  Culver  v.  Marks, 
122  Ind.  554,  23  N.  E.  1068,  17  Am.  St.  Rep.  Zll ,  7  L.  R.  A.  489;  Emery 
v.  Hobson,  63  Me.  32;  Rhett  v.  Poe,  43  U.  S.  (2  How.)  457;  Cassel  v. 
Regierer,  114  N.  Y.  Supp.  601.  But  see  Life  Ins.  Co.  v.  Pendleton,  112 
U.  S.  708,  28  Law.  Ed.  866,  holding  that  presentment  is  necessary,  even 
though   tlie  drawer  has  no  funds  in  the  hands  of  the  drawee,  if  he  has 


284  NOTICE  OF  DISHONOR.  §  2ii 

When  Notice  Need  Not  Be  Given  Indorsee. 

§  214.    Notice  of  dishonor  is  not  required  to  be  given  to  an  in- 
dorser  in  either  of  the  following  cases : 

1.  Where  the  drawee  is  a  fictitious  person  or  a  person 

not  having  capacity  to  contract,  and  the  indorser 
was  aware  of  the  fact  at  the  time  he  indorsed  the 
instrument ; 

2.  Where  the  indorser  is  the  person  to  whom  the  in- 
strument is  presented  for  payment; 

3.  Where  the  instrument  was  made  or  accepted  for  his 

accommodation. 

Similar  rules  apply  to  indorsers,  and  notice  is  not  required  to 
be  given  to  an  indorser  if  the  drawee  is  a  fictitious  person,  or  a 
person  not  having  capacity  to  contract,  and  the  indorser  was 
aware  of  the  fact  at  the  time  he  indorsed ;  ^^  nor  is  it  required  if 
the  indorser  is  the  person  to  whom  the  instrument  is  presented  for 
payment,^*  nor  where  the  instrument  was  made  or  accepted  for 

reason  to  believe  that  the  bill  will  be  accepted.  As  to  the  right  of  the 
drawer  to  notice  of  dishonor  where  the  bill  was  accepted  for  his  accom- 
modation, see  McLaren  v.  Marine  Bank  of  Georgia,  52  Ga.  131;  Barbaroux 
V.  Waters,  44  Mass.  (3  Mete.)  304;  Ross  v.  Bedell,  12  N.  Y.  Super  Ct. 
(5  Duer)  462.  An  accommodation  drawer  is  entitled  to  notice.  Sherrod 
V.  Rhodes,  5  Ala.  683;  Merchants'  Bank  v.  Easley,  44  Mo.  286,  100  Am. 
Dec.  287. 

i2Subdivision  5,  same  sections  of  negotiable  instruments  laws  as  last 
above  cited. 

Jacks  V.  Darrin,  3  E.  D.  Smith  (N.  Y.)  557;  Purchase  v.  Mattison, 
13  N.  Y.  Super.  Ct.  (6  Duer)  587;  Lilley  v.  Miller,  2  Nott  &  McC.  (S.  C.) 
257. 

i3Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl,  Or.,  Pa., 
Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  115);  Ariz.  (§  3418);  111. 
(§  114);  Kan.  (§  122);  Md.  (§  134);  Mich.  (§  117);  Neb.  (§  114);  N.  Y. 
(§  186);  Ohio  (§  3175f);  R.  I.  (§  123);  Wis.  (§  1678-45). 

i*Subdivision  2,  same  sections  of  negotiable  instruments  laws  as  last 
above  cited. 


^21/ 


BY  WHOM   GIVEN.  285 


his  accommodation.15    But  an  indorser  who  signs  for  the  accom- 
modation of  another  party  to  the  paper  is  entitled  to  notice." 

By  Whom  Given. 

§  215.  The  notice  may  be  given  by  or  on  behalf  of  the  holder, 
or  by  or  on  behalf  of  any  party  to  the  instrument  who 
might  be  compelled  to  pay  it  to  the  holder,  and  who, 
upon  taking  it  up,  would  have  a  right  to  reimbursement 
from  the  party  to  whom  the  notice  is  given. 

§  216.  Notice  of  dishonor  may  be  given  by  an  a^ent  either  in  his 
own  name  or  in  the  name  of  any  party  entitled  to  give 
notice,  whether  that  party  be  his  principal  or  not. 

§  217.  Where  the  instrument  has  been  dishonored  in  the  hands 
of  an  agent,  he  may  either  himself  give  notice  to  the  par- 
ties liable  thereon,  or  he  may  give  notice  to  his  principal. 

Notice  of  dishonor  may  be  given  b}^  or  on  behalf  of  the  holder, 
or  by  or  on  behalf  of  any  party  to  the  instrument  who  might  be 
compelled  to  pay  it  to  the  holder,  and  who,  on  taking  it  up,  would 
have  a  right  to  reimbursement  from  the  party  to  whom  notice  is 

In  re  Swift,  106  Fed.  65. 

See  Hull  v.  Myers,  90  Ga.  674,  16  S.  E.  653,  holding  that  if  the  indorser 
has  full  control  of  the  payer's  business,  and  his  relation  to  him  is  such 
that  it  is  his  duty  to  see  that  the  note  is  provided  for,  he  is  not  entitled 
to   notice. 

isSubdivision  3,  same  sections  of  negotiable  instruments  laws  as  last 
above  cited. 

Reid  V.  Morrison,  2  Watts  &  S.  (Pa.)  401. 

leMercantile  Bank  v.  Busby  (Tenn.)  113  S.  W.  390;  French  v.  Bank 
of  Columbia,  4  Cranch,  141;  Perry  v.  Friend,  57  Ark.  437,  21  S.  W.  1065; 
Apple  V.  Lesser,  93  Ga.  749,  21  S.  E.  171;  Sawyer  v.  Brownell,  13  R.  I. 
141,  where  the  note  was  payable  on  demand,  with  interest.  An  accommo- 
dation indorser  of  a  draft  is  entitled  to  notice  of  dishonor  where,  prior 
to  his  indorsement,  the  draft  had  been  altered  by  changing  the  name 
of  the  payee,  and  raising  the  amount.  Susquehanna  Val.  Bank  v.  Loomis, 
85  N.  Y.  207,  39  Am.   Rep.  652. 


286  NOTICE  OF  DISHONOR.  §217 

given.^'^  The  object  of  requiring  the  notice  to  come  from  the 
holder  is  to  enable  him,  as  the  person  chiefly  interested,  to  fix 
or  waive  the  liabilities  of  the  indorsers.^^  As  a  general  rule,  no- 
tice cannot  be  given  by  a  total  stranger,^^  though  it  may  be  given 
by  a  notary  ^o  or  his  clerk.^i  Except  where  he  is  acting  as  the 
agent  for  a  holder,  the  maker  cannot  give  a  valid  notice  of  pro- 
test to  an  accommodation  indorser.22  Notice  is  essential;  mere 
knowledge  by  the  indorser  of  nonpayment  is  not  sufficient.^^ 

May  be  given  by  agent. 

Notice  of  dishonor  may  be  given  by  an  agent,  either  in  his 
own,  or  in  the  name  of  any  party  entitled  to  give  notice,  whether 
that  party  be  his  principal  or  not.^*     One  who  takes  a  note  for 

i7Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or.,  Pa., 
Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  90);  Ariz.  (§  3393);  Ill.(§  89); 
Kan.  (§  97);  Md.  (§  109);  Mich.  (§  92);  Neb.  (§  89);  N.  Y.  (§  161); 
Ohio  (§  3174h);  R.  I.  (§  98);  Wis.  (§  1678-20). 

Cromer  v.  Piatt,  37  Mich.  132,  26  Am.  Rep.  503;  Stanton  v.  Blossom, 
14  Mass.  116;  Staflford  v.  Yates,  18  Johns.  (N.  Y.)  327;  Marshall  v.  Sonne- 
man,  216  Pa.  65,  64  Atl.  874. 

iSHarris  v.  Robinson,  45  U.  S.  (4  How.)  336,  11  Law.  Ed.  133. 

i9Lawrance  v.  Miller,  16  N.  Y.  235;  Chanoine  v.  Fowler,  3  Wend. 
(N.  Y.)    173;  Brower  v.  Wooten,  4  N.  C.  507. 

20Burbank  v.  Beach,  15  Barb.  (N.  Y.)  326;  Renick  v.  Robbins,  28  Mo. 
339.  But  in  giving  such  notice,  a  notary  does  not  act  in  his  official 
capacity,  but  merely  as  an  agent.  Bank  of  Linsborg  v.  Ober,  31  Kan. 
559,  3  Pac.  324;  Swayze  v.  Britton,  17  Kan.  625. 

2iMunroe  v.  Woodrufif,  17  Md.  159;  Cowperthwaite  v.  Sheffield,  3  N.  Y. 
Super.  Ct.  416. 

22Traders'  Nat.  Bank  v.  Jones,  104  App.  Div.  433,  93  N.  Y.  Supp.  768. 

23Marshall  v.  Sonneman,  216  Pa.  65,  64  Atl.  874. 

24Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl,  Or.,  Pa., 
Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  91);  Ariz.  (§  3394);  111.  (§90); 
Kan.  (§  98);  Md.  (§  110);  Mich.  (§  93);  Neb.  (§  90);  N.  Y.  (§  162); 
Ohio   (§  3174J);   R.  L   (§  99);  Wis.    (§  1678-21). 

Notice  by  notary  as  agent,  see  supra,  note  20.  Notice  may  be  given 
in  agent's  name.  Drexler  v.  McGlynn,  99  Cal.  143,  33  Pac.  773.  Cashier 
of  bank  which  is  the  holder  may  give  notice.  Bank  of  State  of  Missouri 
V.  Vaughan,  36  Mo.  90. 


§219  BENEFIT   OF.  287 

collection  is  an  agent  for  the  purpose  of  giving  notice,^  and  the 
owner  of  a  note  who  has  placed  it  with  another  for  collection  is 
not  obligated  either  to  himself  notify  the  indorser  of  dishonor  of 
the  note  or  to  make  inquiries  as  to  where  the  indorser  received 
his  mail.26  If  the  instrument  has  been  dishonored  in  the  hands 
of  an  agent,  he  may  either  himself  give  notice  to  the  parties  there- 
on, or  he  may  give  notice  to  his  principal.^^ 

§  218.  Where  notice  is  given  by  or  on  behalf  of  the  holder,  it 
inures  for  the  benefit  of  all  subsequent  holders  and  all 
prior  parties  who  have  a  right  of  recourse  against  the 
party  to  whom  it  is  given. 

§  219.  Where  notice  is  given  by  or  on  behalf  of  a  party  entitled 
to  give  notice,  it  inures  for  the  benefit  of  the  holder  and 
all  parties  subsequent  to  the  party  to  whom  notice  is 
given. 

Where  notice  is  given  by  or  on  behalf  of  the  holder,  it  inures 
to  the  benefit  of  all  subsequent  holders  and  all  prior  parties  who 
have  a  right  of  recourse  against  the  party  to  whom  it  is  given.^^ 

25Mead  v.  Engs,  5  Cow.  (N.  Y.)  303;  Burnham  v.  Webster,  19  Me. 
232;  Blakeslee  v.  Hewett,  76  Wis.  341,  44  N.  W.  1105.  Bank  holding 
for  collection  may  give  notice  of  dishonor.  Manchester  Bank  v.  Fellows, 
28  N.  H.  302;  Mead  v.  Engs,  5  Cow.  (N.  Y.)  303;  Sheldon  v.  Benham, 
4  Hill    (N.  Y.)  129,  40  Am.  Dec.  271. 

26Vogel  V.  Starr,  132  Mo.  App.  430,  112  S.  W.  27. 

27Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or.,  Pa., 
Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  94);  Ariz.  (§  3397);  111.  (§  93); 
Kan.  (§  101)  ;Md.  (§  113);  Mich.  (§  96);  Neb.  (§  93);  N.  Y.  (§  165); 
Ohio  (§  3174e);  R.  I.  (§  102);  Wis.  (§  1678-24). 

Bank  of  United  States  v.  Goddard,  5  Mason,  366,  Fed.  Cas.  No.  917; 
Foster  v.  McDonald,  3  Ala.  34;  First  Nat.  Bank  v.  Smith,  132  Mass. 
227;  Bank  of  United  States  v.  Davis,  2  Hill  (N.  Y.)  451;  Hill  v.  Planters' 
Bank,  21  Tenn.  (2  Humph.)  670. 

28Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C.,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or.,  Pa., 
Tenn.,  Utnh.  Va..  Wash.,  W.  Va.,  Wyo.  (§  92);  Ariz.  (§  3395);  111.  (§  91); 


288  NOTICE  OF  DISHONOR.  §  220 

Where  notice  is  given  by  or  on  behalf  of  a  party  entitled  to  give 
notice,  it  inures  to  the  benefit  of  the  holder  and  all  parties  sub- 
sequent to  the  party  to  whom  notice  is  given.^^ 

iTo  "Whom  Given. 

§  220.  Notice  of  dishonor  may  be  given  either  to  the  party  him- 
self or  to  his  agent  in  that  behalf. 

§  221.  When  any  party  is  dead,  and  his  death  is  known  to  the 
party  giving  notice,  the  notice  must  be  given  to  a  per- 
sonal representative,  if  there  be  one,  and  if  with  reason- 
able diligence  he  can  be  found.  If  there  be  no  personal 
representative,  notice  may  be  sent  to  the  last  residence 
or  last  place  of  business  of  the  deceased. 

§  222.  Where  the  parties  to  be  notified  are  partners,  notice  to 
any  one  partner  is  notice  to  the  firm,  even  though  there 
has  been  a  dissolution. 

§  223.  Notice  to  joint  parties  who  are  not  partners  must  be  given 
to  each  of  them,  unless  one  of  them  has  authority  to  re- 
ceive such  notice  for  the  others. 

§  224.  Where  a  party  has  been  adjudged  a  bankrupt  or  an  in- 
solvent, or  has  made  an  assignment  for  the  benefit  of 
creditors,  notice  may  be  given  either  to  the  party  him- 
self or  to  his  trustees  or  assignee. 

Kan.  (§  99);  Md.  (§  111);  Mich.  (§  94);  Neb.  (§  91);  N.  Y.  (§  163); 
Ohio  (§  3174J);  R.  I.  (§  100);  Wis.  (§  1678-22). 

Marr  v.  Johnson,  17  Tenn.  (9  Yerg.)  1. 

29Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl,  Or.,  Pa., 
Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  93);  Ariz.  (§  3396);  111.  (§  92); 
Kan.  (§  100);  Md.  (§  112);  Mich.  (§  95);  Neb.  (§  92);  N.  Y.  (§  164); 
Obio   (§  3174k);  R.  L   (§  101);  Wis.   (§  1678-23). 

Union  Bank  v.  Grimshaw,  8  La.  205;  Brailsford  v.  Williams,  15  Md. 
L50,  74  Am.  Dec.  559;  Linn  v.  Horton,  17  Wis.  151. 


§  2_-4:  TO  WHOM  GIVEN.  289 

To  whom  notice  given — Paity  or  agent. 

Notice  of  dishonor  may  be  given  either  to  the  party  l^imsclf 
or  to  his  agent  in  that  behalf.^" 

Same — Personal  representative  of  deceased  party. 

When  any  party  to  be  notified  is  dead,  and  his  death  is  known 
to  tlie  party  giN'ing  notice,  the  notice  must  be  given  to  a  personal 
representative  of  the  deceased,  if  there  be  one,  and  if,  with  rea- 
sonable diligence,  he  can  be  found.^^     If  there  is  no  personal  rep- 

30Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or.,  Pa., 
Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  97);  Ariz  (§  3400);  111.  (§  96); 
Kan.  (§  104);  Md.  (§  116);  Mich.  (§  99);  Neb.  (§  96);  N.  Y.  (§  168); 
Ohio   (§  3174-0);   R.   I.    (§  105);   Wis.   (§  1678-27). 

Fassin  v.  Hubbard,  55  N.  Y.  465,  where  it  was  held  that  service  on  the 
liquidating  agent  of  a  firm  was  good.  Death  of  the  principal  revoking 
agency,  see  note  31,  infra. 

siNeg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or.,  Pa., 
Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  98);  Ariz.  (§  3401);  111. 
(§  97);  Kan.  (§  105);  Md.  (§  117);  Mich.  (§  100);  Neb.  (§  97);  N.  Y. 
(§  169);  Ohio  (§  3174p);  R.  I.'  (§  106);  Wis.   (§  1678-28). 

Dodson  V.  Taylor,  56  N.  J.  Law,  11,  28  Atl.  316;  Merchants'  Bank  v. 
Birch,  17  Johns.  (N.  Y.)  25,  8  Am.  Dec.  367;  Cayuga  County  Bank  v. 
Bennett,  5  Hill  (N.  Y.)  236,  where  the  holder,  knowing  the  indorser 
to  be  dead,  sent  the  notice  by  mail  directed  to  the  deceased.  An  ex- 
cutor  named  in  the  will,  but  yet  not  approved  by  the  court,  is  a  "personal 
representative,"  within  the  rule.  Drexler  v.  McGlynn,  99  Cal.  143,  33  Pac. 
773.  The  agency  to  receive  notice  is  revoked  by  the  death  of  the  principal, 
and  notice  should  thereafter  be  given  to  the  personal  representative. 
Brent  v.  Washington  Bank,  2  Cranch  C.  C.  517,  Fed.  Cas.  No.  1,834; 
Bank  of  Washington  v.  Pierson,  2  Cranch  C.  C.  685,  Fed.  Cas.  No.  953. 
Notice  to  an  executor  after  the  appointment  of  a  special  administrator 
is  not  sufficient.  Goodnow  v.  Warren,  122  Mass.  19,  23  Am.  Rep.  289.  A 
notice  sent  to  the  "estate  of"  a  deceased  indorser  at  his  last  residence 
was  held  sufficient  in  Bank  of  Port  Jervis  v.  Darling,  91  Hun,  236,  36 
N.  Y.  Supp.  153,  and  one  addressed  to  the  "legal  representative"  of  a 
deceased  indorser  was  also  held  sufficient  in  Pillow  v.  Hardeman,  22 
Tenn.  (3  Humph.)  538,  39  Am.  Dec.  195.  Where  an  indorser  died  before 
its  maturity,  a  notice  given  two  days  after  maturity  to  the  executor  is 
not  sufficient  to  bind  the  estate.     Deininger  v.  Miller,  7  App.  Div.  409,  40 

Opp. — Sel. — 19 


290  NOTICE  OF  DISHONOR.  ^§224 

resentative,  notice  may  be  sent  to  the  last  residence  or  last  place 
of  business  of  the  deceased.^^ 

Same — Notice  to  partner  is  notice  to  firm. 

"Where  the  parties  to  be  notified  are  partners,  notice  to  any  one 
partner  is  notice  to  the  firm,  though  the  firm  has  been  dissolved* 

Same — Joint  parties  not  partners  must  each  be  notified. 

Notice  to  joint  parties  who  are  not  partners  must  be  given  to 
each  of  them,  unless  one  of  them  has  authority  to  receive  such  no- 
tice for  the  others.^* 

N.  Y.  Supp.  195.  Notice  to  one  of  several  personal  representatives  is 
good.     Beals  v.  Peck,  12  Barb.  (N.  Y.)  245. 

32Same  sections  of  negotiable  instruments  laws  as  last  above  cited. 

Dodson  V.  Taylor,  56  N.  J.  Law,  11,  28  Atl.  316.  Mailing  notice  of 
dishonor  to  indorser,  known  to  be  dead,  directed  to  a  post  office  where 
he  did  not  receive  his  mail  while  living,  is  insufficient.  Merchants'  Bank 
of  Canada  v.  Brown,  86  App.  Div.  599,  83  N.  Y.  Supp.  1037. 

33Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D,,  Okl,  Or.,  Pa., 
Tenn.,  Utah.  Va.,  Wash.,  W.  Va.,  Wyo.  (§  99);  Ariz  (§  3402);  111.  (§  98); 
Kan.  (§  106);  Md.  (§  118);  Mich.  (§  101);  Neb.  (§  98);  N.  Y.  (§  170); 
Ohio  (§  3174q);  R.  I.   (§  107);  Wis.   (§  1678-29). 

Coster  V.  Thomason,  19  Ala.  717;  Magee  v.  Dunbar,  5  La.  711;  Fourth 
Nat.  Bank  v.  Altheimer,  91  Mo.  190,  3  S.  W.  858;  Hibbard  v.  Matthews, 
54  N.  Y.  43,  13  Am.  Rep.  562.  Notice  to  a  cashier  of  a  bank  who  was  a- 
member  of  a  firm,  acquired  in  the  course  of  the  business  of  the  bank, 
is  notice  to  the  firm.  Citizens'  Sav.  Bank  v.  Hays,  96  Ky.  365,  29  S.  W. 
20.  Notice  to  surviving  partner  is  sufficient.  Dabney  v.  Stidger,  12 
Miss.  (4  Smedes  &  M.)  749;  Cocke  v.  Bank  of  Tennessee,  25  Tenn.  (5 
Humph.)  51. 

A  notarial  certificate  to  control  which  no  evidence  is  ofifered  furnishes 
sufficient  proof  of  the  maker's  failure  to  pay  the  note  at  maturity,  and  of 
notice  of  dishonor  to  a  partnership  indorser,  even  if  the  partnership 
had  been  dissolved,  and  defendant  partner  not  informed  by  his  former 
partner  of  the  protest.  Feigenspan  v.  McDonnell,  201  Mass.  341,  87 
N.  E.  624. 

34Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C.  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or.,  Pa., 
Tenn.,    Utah,   Va.,    Wash.,    W.    Va.,    Wyo.    (§  100);    Ariz.    (§  3403);    111. 


§225  FORM   AND   REQUISITES.  291 

Same — Notice  to  bankrupt  or  insolvent. 

Where  a  party  to  be  notified  has  been  adjudged  a  bankrupt  or  an 
insolvent,  or  has  made  an  assignment  for  the  benefit  of  creditors, 
notice  may  be  given  either  to  such  party  himself,  or  to  his  trustee 
or  assignee.^^ 

Form  and  Requisites, 

§  225.  The  notice  may  be  in  writing  or  merely  oral,  and  may  be 
given  in  any  terms  which  sufficiently  identify  the  in- 
strument, and  indicate  that  it  has  been  dishonored  by 
nonacceptance  or  nonpayment. 


(§  99);   Kan.   (§  107);   Md.   (§  119);   Mich.   (§  102);   Neb.   (§  99);   N.   Y. 
(§  171);   Ohio   (§  3174r);   R.    I.    (§  108);   Wis.    (§  1678-30). 

Shepard  v.  Hawley,  1  Conn.  367,  6  Am.  Dec.  244;  State  Bank  v.  Slaught- 
er, 7  Blackf.  (Ind.)  132;  Peoples'  Bank  v.  Keech,  26  Md.  521,  90  Am. 
Dec.  118;  Willis  v.  Green,  5  Hill  (N.  Y.)  232,  40  Am.  Dec.  351.  In  Ken- 
tucky, notice  to  one  joint  indorser  is  notice  to  all.  Dodge  v.  Bank  of 
Kentucky,  9  Ky.  (2  A.  K.  Marsh)  610;  Higgins  v.  Morrison,  34  Ky.  (4  Dana) 
100.  Notice  to  one  of  several  successive  indorsers  is  sufficient  to  bind 
him.  City  Nat.  Bank  v.  Clinton  County  Nat.  Bank,  49  Ohio  St.  351, 
30   N.    E.   958. 

35Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl,  Or.,  Pa., 
Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  101);  Ariz.  (§  3404);  111. 
(§  100);  Kan.  (§  108);  Md.  (§  120);  Mich.  (§  103);  Neb.  (§  100);  N.  Y. 
(§  172);  Ohio  (§  3174s);  R.  I.  (§  109);  Wis.  (§  1678-31): 

Notice  to  assignee,  see  Callahan  v.  Bank  of  Kentucky,  82  Ky.  231; 
American  Nat.  Bank  v.  Junk  Bros.  Lumiber  &  Mfg.  Co.,  94  Tenn.  624,  30 
S.  W.  753,  28  L.  R.  A.  492.  Notice  to  an  indorser  is  sufficient,  though  he 
has  assigned  for  the  benefit  of  creditors.  Donnell  v.  Louis  County 
Sav.  Bank,'  80  Mo.  165.  In  Ohio,  notice  to  an  indorser's  assignee  for 
creditors  was  not  sufFicient.  House  v.  Vinton  Nat.  Bank,  43  Ohio 
St.  346,  1  N.  E.  129,  54  Am.  Rep.  813. 


292  NOTICE  OF  DISHONOR.  §226 

§  226.  A  written  notice  need  not  be  signed,  and  an  insiTfficient 
written  notice  may  be  supplemented  and  validated  by  ver- 
bal communication.  A  misdescription  of  the  instrument 
does  not  vitiate  the  notice  unless  the  party  to  whom  the 
notice  is  given  is  in  fact  misled  thereby. 

Notice  of  dishonor  may  be  in  writing,  or  merely  oral,^^  and 
should  be  addressed  to  the  person  sought  to  be  held.^^  A  written 
notice  need  not  be  signed,  and  an  insufficient  written  notice  may 
be  supplemented  and  validated  by  verbal  communication.^^  Mere 
knowledge  of  the  facts  is  not  equivalent  to  notice,^^  though  such 
knowledge  was  acquired  by  the  indorsers  in  their  capacity  as  ad- 
ministrators of  the  estate  of  the  drawer,*° 

Sufficiency  of  terms  and  effect  of  misdescription. 

Notice  of  dishonor  may  be  given  in  any  terms  which  sufficiently 
identify  the  instrument,  and  indicate  that  it  has  been  dishonored 
by  nonacceptance  or  nonpayment.*^    A  misdescription  of  the  in- 

36Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or.,  Pa., 
Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  96);  Ariz.  (§  3399);  111.  (§  95); 
Kan.  (§  103);  Md.  (§  115);  Mich.  (§  98);  Neb.  (§  95);  N.  Y.  (§  167); 
Ohio  (§  3174n);  R.  L  (§  104);  Wis.  (§  1678-26). 

Pierce  v.  Schraden,  55  Cal.  406;  First  Nat.  Bank  v.  Hatch,  78  Mo. 
13;  Cuyler  v.  Stevens,  4  Wend.  (N.  Y.)  566;  Second  Nat.  Bank  v. 
Smith,  118  Wis.  18,  94  N.  W.  664. 

3VMarshall  v.  Sonneman,  216  Pa.  65,  64  Atl.  874. 

ssNeg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or.,  Pa., 
Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  95);  Ariz  (§  3398);  111.  (§  94); 
Kan.  (§  102);  Md.  (§  114);  Mich.  (§  97);  Neb.  (§  94);  N.  Y.  (§  166); 
Ohio  (§  3174m);  R.  I.  (§  103);  Wis.  (§  1678-25). 

Formerly  in  New  York  an  unsigned  notice  was  invalid.  Walmsley 
V.  Acton,  44  Barb.  (N.  Y.)  312.  Also  in  Tennessee.  Peoples'  Nat. 
,Bank  v.  Dibrell,  91  Tenn.  301,  18  S.  W.  626.  A  printed  signature  is 
good.     Sussex  Bank  v.  Baldwin,  17  N.  J.  Law,  487. 

39Tindal  v.  Brown,  1  Term  R.  167. 

40Juniata  Bank  v.  Hale,  16  Serg.  &  R.   (Pa.)   157,  16  Am.  Dec.  558. 

*iNeg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or.,  Pa.. 


§227  HOW  GIVEN.  293 

strument  in  the  notice  docs  not  vitiate  the  notice  unless  the  party 
to  whom  the  notice  is  given  is  in  fact  misled  thereby .*2 


Hov7  Given. 

§  227.     The  notice  may  in  all  cases  be  given  by  delivering  it  per- 
sonally or  through  the  mails. 

Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo  (§  96);  Ariz.  (§  3399);  111.  (§  95); 
Kan.  (§  103);  Md.  (§  115);  Mich.  (§  98);  Neb.  (§  95);  N.  Y.  (§  167); 
Ohio  (§  3174n);  R.  I.  (§  104);  Wis.  (§  1678-26). 

Second  Nat.  Bank  v.  Smith,  118  Wis.  18,  94  N.  W.  664;  Kilgore 
V.  Buckley,  14  Conn.  362;  Spann  v.  Baltzell,  1  Fla.  301,  46  Am. 
Dec.  346;  Sasscer  v.  Farmers'  Bank,  4  Md.  409;  Ross  v.  Planters'  Bank, 
24  Tenn.  (5  Humph.)  335.  As  to  the  sufficiency  of  the  recital  of  the  date, 
see  Brown  v.  Jones,  125  Ind.  375,  25  N.  E.  452,  21  Am.  St.  Rep.  227; 
Artisans'  Bank  v.  Backus,  36  N.  Y.  100.  The  name  of  the  maker  or  draw- 
er must  be  properly  given  in  the  notice.  Home  Ins.  Co.  v.  Green,  19  N. 
Y.  518,  75  Am.  Dec.  361.  But  see  Gill  v.  Palmer,  29  Conn.  54.  For  illegible 
name,  see  McGeorge  v.  Chapman,  45  N.  J.  Law,  395.  A  mistake  in  the 
recital  of  the  time  of  payment  of  the  instrument  is  not  fatal.  Gates  v. 
Beecher,  60  N.  Y.  518,  19  Am.  Rep.  207;  Bank  of  Cooperstown  v.  Woods, 
28  N.  Y.  561.  Nor  is  a  mistake  in  the  recital  of  the  amount  payable. 
Bank  of  Alexandria  v.  Swann,  34  U.  S.  (9  Pet.)  33,  9  Law.  Ed.  40;  Cayuga 
County  Bank  v.  Warden,  1  N.  Y.  413,  where  a  note  for  $600  was  de- 
scribed as  one  for  $300.  A  notice  to  an  indorser  of  one  of  a  series  of 
corporate  notes,  numbered  differently,  is  not  defective  for  a  failure  to 
state  the  number  of  the  note.  Hodges  v.  Shuler,  22  N.  Y.  114.  The  notice 
mu&t  show  that  the  instrument  was  presented  for  payment  or  acceptance, 
and  was  dishonored.  Armstrong  v.  Thurston,  11  Md.  148;  Dole  v.  Gold, 
S  Barb.  (N.  Y.)  490.  For  notices  held  sufficient  in  this  respect,  see  Cook 
V.  Litchfield,  9  N.  Y.  279;  Reynolds  v.  Appleman,  41  Md.  615;  Clark  v. 
Eldridge,  54  Mass.  (13  Mete.)  96.  For  notices  held  insufficient  in  this 
respect,  see  Arnold  v.  Kinloch,  50  Barb.  (N.  Y.)  44;  Winn  v.  Alden,  4 
Denio  (N.  Y.)  163;  Page  v.  Gilbert,  60  Me.  485.  Notice  containing  copy 
of  note  and  declaring  that  payment  has  been  demanded  and  refused 
held  sufficient.     Zollner  v.  Moffitt,  222  Pa.  644,  72  Atl.  285. 

42Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla,,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or.,  Pa., 
Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  95);  Ariz.  (§  3398);  111.  (§  94); 
Kan.  (§  102);  Md.  (§  114);  Mich.  (§  97);  Neb.  (§  94);  N.  Y.  (§  166); 
Ohio  (§  3174mj;  R.  I.  (§  103);  Wis.  (§  1678-25). 


294  NOTICE  OF  DISHONOR.  §  228 

§  228.  Where  notice  of  dishonor  is  duly  addressed  and  depos- 
ited in  the  post  office,  the  sender  is  deemed  to  have  given 
due  notice,  notwithstanding  any  miscarriage  in  the  mails. 

Notice  is  deemed  to  have  been  deposited  in  the  post  office  when 
deposited  in  any  branch  post  office  or  in  any  letter  box 
under  the  control  of  the  post  office  department. 

Notice  of  dishonor  may  in  all  cases  be  given  by  delivering  it 
personally,  or  through  the  mails.*^  Personal  service  being  relied 
upon,  the  evidence  must  show  either  actual  personal  service  or 
an  ordinarily  intelligent,  diligent  effort  to  make  personal  service 
upon  the  indorser,  either  at  his  place  of  business  during  business 
hours,  or  at  his  residence  if  he  has  no  place  of  business;  but  if 
he  be  absent,  it  is  not  necessary  to  call  a  second  time,  and  the 
notice  may  in  that  event  be  left  with  any  one  found  in  charge, 
or  if  there  be  no  one  in  charge,  or  no  one  there,  then  the  giving 
of  the  notice  is  deemed  to  be  waived.^*  Personal  service  is  not 
required,  but  constructive  service  will  suffice  where  reasonable  dil- 
igence is  exercised  to  make  it  in  the  manner  best  adapted  to  con- 
vey actual  notice. ^^  Formerly,  in  most  of  the  states  that  have 
adopted  the  negotiable  instruments  laws,  notice  could  not  be  sent 
by  mail  where  the  parties  resided  in  the  same  tow^n  or  city.*^ 

See  Kilg^ore  v.  Bulkley,  14  Conn.  362,  and  other  cases  cited  in  note 
41,  supra. 

43Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or.,  Pa., 
Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  96);  Ariz.  (§  3399);  111.  (§  95); 
Kan.  (§  103);  Md.  (§  115);  Mich.  (§  98);  Neb.  (§  95);  N.  Y.  (§  167); 
Ohio  (§  3174n);  R.  I.  (§  104);  Wis.  (§  1678-26). 

Zollner  v.  Moffitt,  222  Pa.  644,  72  Atl.  285. 

•I'lAmerican  Exchange  Nat.  Bank  v.  American  Hotel  Victoria  Co.,  103 
App.  Div.  372,  92  N.  Y.  Supp.  1006. 

45Vogel  V.  Starr,  132  Mo.  App.  430,  112  S.  W.  27. 

46Shepard  v.  Hall,  1  Conn.  329;  Morton  v.  Cammack,  11  D.  C.  (4  Mc- 
Arthur)  22;  Bell  v.  Hagerstown  Bank,  7  Gill  (Md.)  216;  Peirce  v.  Pendar, 
46  Mass.  (5  Mete.)  352;  Sheldon  v.  Benham,  4  Hill  (N.  Y.)  129,  40  Am. 
Dec.  271;  Costin  v.  Rankin,  48  N.  C.  (3  Jones  Law)  387;  Davis  v.  Bank 
of  Tennessee,  36  Tenn.  (4  Sneed)  390;  Smith  v.  Hill,  6  Wis.  154.  In 
Wisconsin,  service  could  be  made  by  mail  if  the  distance  was  more  than 


§228  BY   MAIL.  295 

Sender  of  notice  not  chargeable  with  miscarriage  of  mails. 

Whfere  notice  of  dishonor  is  properly  addressed  and  deposited 
in  the  post  office,  the  sender  is  deemed  to  have  given  due  notice, 
notwithstanding  any  miscarriage  in  the  mails.^''' 

What  constitutes  deposit  of  notice  in  post  office. 

Notice  of  dishonor  is  deemed  to  have  been  deposited  in  the  post 
office  when  deposited  in  any  branch  post  office,  or  in  any  letter 
box  under  the  control  of  the  post  office  department.^^  A  liberal 
construction  of  this  rule  renders  a  delivery  of  a  duly  addresed 
and  stamped  letter  containing  a  notice  to  a  regular  letter  carrier 
a  sufficient  posting  of  the  notice.*^  But  a  deposit  of  the  letter 
containing  the  notice  in  a  private  letter  box  is  not  sufficient.^" 

two  miles.  Rev.  St.  1858,  c.  12,  §  5.  Westfall  v.  Farwell,  13  Wis.  504. 
But  see  Rev.  St.  §  176.  In  New  York  (Laws  1857,  c.  416)  and  Virginia 
(Code,  §  2858),  service  could  be  made  by  mail  between  parties  residing 
in  the  same  city. 

47Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or.,  Pa., 
Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  105);  Ariz.  (§  3408);  111. 
(§  104);  Kan.  (§  112);  Md.  (§  124);  Mich.  (§  107);  Neb.  (§  104);  N.  Y. 
(§  176);  Ohio  (§  3174w);  R.  L  (§  113);  Wis.  (§  1678-35). 

Knott  v.  Venable,  42  Ala.  186;  Dickens  v.  Beal,  35  U.  S.  (10  Pet.)  572, 
9  Law.  Ed.  246;  Mt.  Vernon  Bank  v.  Holden,  2  R.  I.  467.  Notice  deemed 
given  when  properly  addressed  and  deposited  in  post  office,  though 
not  received.  Zollner  v.  Moffitt,  222  Pa.  644,  72  Atl.  285.  Sending 
to  directory  address  not  sufficient  diligence,  see  note  72,  infra. 

*SNeg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or.,  Pa., 
Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§106);  Ariz.  (§  3409);  111. 
(§  105);  Kan.  (§  113);  Md.  (§  125);  Mich.  (§  108);  Neb.  (§  105);  N.  Y. 
(§  177);  Ohio  (§  3l74x);  R.  I.  (§  114);  Wis.  (§  1678-36). 

This  is  the  rule  in  Casco  Nat.  Bank  v.  Shaw,  79  Me.  376,  10  Atl.  67,  1 
Am.  St.  Rep.  .319;  Greenwich  Bank  v.  DeGroot,  7  Hun  (N.  .Y.)  210; 
Wood  V.  Callaghan,  61  Mich.  402,  28  N.  W.  162,  1  Am.  St.  Rep.  597; 
Johnson  v.  Brown,  154  Mass.  105,  27  N.  E.  994. 

49Wynen  v.  Schavert,  6  Daly,  558,  55  How.  Pr.  (N.  Y.)  156;  Pearce  v. 
Langfit,  101  Pa.  507,  47  Am.  Rep.  111. 

eoTownsend  v.  Auld,  10  Misc.  343,  31  N.  Y.  Supp.  29. 


296  NOTICE  OF  DISHONOR.  ^  Zlid 

Time  Within  "Which  Notice  Must  Be  Given. 

§  229.  Notice  may  be  given  as  soon  as  the  instrument  is  dishon- 
ored, and  unless  delay  is  excused  as  hereinafter  provided, 
must  be  given  within  the  times  hereinafter  specified. 

Notice  of  dishonor  may  be  given  as  soon  as  the  instrument  is 
dishonored,^^  and  must  be  given  within  the  times  fixed  by  the  ne- 
gotiable instruments  laws,^^  as  shown  in  the  next  succeeding  sec- 
tions, unless  the  delay  is  excused  for  the  causes  hereinafter  set 
forth, 

§  230.  Where  the  person  giving  and  the  person  to  receive  notice 
reside  in  the  same  place,  notice  must  be  given  within 
the  following  times: 

1.  If  given  at  the  place  of  business  of  the  person  to  re- 
ceive notice,  it  must  be  given  before  the  close  of  busi- 
ness hours  on  the  day  follov/ing; 

2.  If  given  at  his  residence,  it  must  be  given  before  the 

usual  hours  of  rest  on  the  day  following ; 

3.  If  sent  by  mail,  it  must  be  deposited  in  the  post  of- 
fice in  time  to  reach  him  in  the  usual  course  on  the 
day  following. 

Where  the  person  and  the  person  to  receive  notice  reside  in 
the  same  place,  notice  of  dishonor,  if  given  at  the  place  of  busi- 
ness of  the  person  to  receive  notice,  must  be  given  before  the  close 

BiNeg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or.,  Pa., 
Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  102);  Ariz.  (§  3405);  111. 
(§  101);  Kan.  (§  109);  Md.  (§  121);  Mich.  (§  104);  Neb.  (§  101);  N.  Y. 
(§  173);  Ohio  (§  3174t);  R.  L  (§  110);  Wis.   (§  1678-32). 

As  to  premature  notice  where  days  of  grace  are  allowed,  see  Guignon  v. 
Union  Trust  Co.,  156  111.  135,  40  N.  E.  556,  47  Am.  St.  Rep.  186;  Thorn- 
burg  V.  Emmons,  23  W.  Va.  325;  Pierce  v.  Cate,  66  Mass.  (12  Cush.)  190, 
59  Am.  Dec.  176. 

62Same  sections  of  negotiable  instruments  laws  as  last  above  cited. 


§231  TIME   FOR   GIVING.  297 

of  business  hours  on  the  day  following  dishonor.^^  If  gh'cn  at  his 
residence,  it  must  be  given  before  the  usual  hours  of  rest  on  the 
day  following  dishonor.^-*  The  negotiable  instruments  laws  as 
adopted  in  Rhode  Island  provides  that,  in  such  case,  notice  must 
be  given  before  ten  o'clock  in  the  evening  of  the  day  following 
dishonor.55  jf  ^q-^^  \^y  mail,  the  notice  must  be  deposited  in  the 
post  oflSce  in  time  to  reach  the  person  to  be  notified,  in  the  usual 
course,  on  the  day  following  dishonor.^^ 

/ 
§  231.     Where  the  person  giving  and  the  person  to  receive  notice 

reside  in  different  places,  the  notice  must  be  given 

within  the  following  times: 

1.  If  sent  by  mail,  it  must  be  deposited  in  the  post  of- 
fice in  time  to  go  by  mail  the  day  following  the  day 
of  dishonor,  or  if  there  be  no  mail  at  a  convenient 
hour  on  that  day,  by  the  next  mail  thereafter; 

2.  If  given  otherwise  than  through  the  post  office,  then 
within  the  time  that  notice  would  have  been  received 
in  due  course  of  mail,  if  it  had  been  deposited  in 
the  post  office  within  the  time  specified  in  the  last 
subdivision. 

"Where  the  person  giving,  and  the  person  to  receive,  notice  of 
dishonor,  reside  in  different  places,  the  notice,  if  sent  by  mail, 

53Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or.,  Pa., 
Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  103);  Ariz.  (§  3406);  111. 
(§  102);  Kan.  (§  110);  Md.  (§  122);  Mich.  (§  105);  Neb.  (§  102);  N.  Y 
(§  174);  Ohio  (§  3174v);  R.  I.  (§  111);  Wis.  (§  1678-33). 

Adams  v.  Wright,  14  Wis.  408;  Citizens'  Bank  v.  First  Nat.  Bank, 
135  Iowa,  605,  113  N.  W.  481. 

siSubdivision  2,  same  sections  of  negotiable  instruments  laws  as  last 
above  cited.    • 

See  Hallowell  v.  Currj^  41  Pa.  322.  Formerly,  in  Wisconsin,  at  a  "rea- 
sonable hour."  Adams  v.  Wright,  14  Wis.  408. 

55Negotiable  Inst.  Law,  §  111. 

56Subdivision  3,  same  sections  of  negotiable  instruments  laws  as  last 
above  cited. 


298  NOTICE  OF  DISHONOR.  §232 

must  be  deposited  in  the  post  office  in  time  to  go  by  mail  the  day 
following  the  day  of  dishonor,  or,  if  there  be  no  mail,  at  a  con- 
venient hour  on  that  day,  by  the  next  mail  thereafter."  When 
given  otherwise  than  through  the  post  office,  notice  must  be  given 
within  the  time  that  notice  would  have  been  received  in  due 
course  of  mail,  if  it  had  been  deposited  in  the  post  office  within 
the  time  specified  in  the  last  preceding  paragraph.^^ 

§  232.  Where  a  party  receives  notice  of  dishonor,  he  has,  after 
the  receipt  of  such  notice,  the  same  time  for  giving  no- 
tice  to  antecedent  parties  that  the  holder  has  after  the 
dishonor. 

A  party  receiving  notice  of  dishonor,  he  has,  after  receipt  there- 
of, the  same  time  for  giving  notice  to  antecedent  parties  that 
the  holder  has  after  dishonor.^^ 

Walters  v.  Brown,  15  Md.  285,  74  Am.  Dec.  566;  Shoemaker  v.  Mechan- 
ics Bank,  59  Pa.  79,  98  Am.  Dec.  315.  What  constitutes  deposit  in  post 
office,  see  ante,  §  228. 

57Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or.,  Pa., 
Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  104);  Ariz.  (§  3407);  111. 
(§  103);  Kan.  (§  111);  Md.  (§  123);  Mich.  (§  106);  Neb.  (§  103);  N.  Y. 
(§  175);  Ohio  (§  3174v);  R.  I.   (§  112);  Wis.   (§  1678-34). 

Smith  V.  Poillon,  87  N.  Y.  590,  41  Am.  Rep.  402,  afg.  23  Hun  (N.  Y.) 
528;  Sussex  Bank  v.  Baldwin,  17  N.  J.  Law,  487;  Lenox  v.  Roberts,  15 
U.  S.  (2  Wheat.)  373,  4  Law.  Ed.  264;  Lawson  v.  Farmers'  Bank  of  Salem, 
1  Ohio  St.  206;  First  Nat.  Bank  v.  Miller,  139  Wis.  126,  120  N.  W.  820. 

ssSubdivision  2,  same  sections  of  negotiable  instruments  laws  as  last 
above  cited. 

59Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or.,  Pa., 
Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  107);  Ariz.  (§  3410);  111. 
(§  106);  Kan.  (§  114);  Md.  (§  126);  Mich.  (§  109);  Neb.  (§  106);  N.  Y. 
(§  178);  Ohio  (§  3174y);  R.  I.  (§  115);  Wis.  (§  1678-37). 

See  Jurgens  v.  Wichmann,  124  App.  Div.  531,  108  N.  Y.  Supp.  881 ;  Farmer 
V.  Rand,  16  Me.  453;  National  Bank  v.  Bradley,  117  N.  C.  526,  23  S.  E.  455; 
Shelburne  Falls  Nat.  Bank  v.  Townsley,  102  Mass.  177,  3  Am.  Rep.  445. 
See,  also,  First  Nat.  Bank  v.  Farneman,  93  Iowa,  161,  61  N.  W.  424. 
For  effect  of  intermediate  agency  for  collection,  on  time  required  for 
notice  to  successive  obligors,  see  Slack  v.  Longshaw,  8  Ky.  Law  Rep. 


§234  PLACE  SENT.  299 

§  233.  Where  the  instrument  has  been  dishonored  in  the  hands 
of  an  agent,  and,  if  he  gives  notice  to  his  principal,  he 
must  do  so  within  the  same  time  as  if  he  were  the  holder, 
and  the  principal  upon  the  receipt  of  such  notice  has 
himself  the  same  time  for  giving  notice  as  if  the  agent 
had  been  an  independent  holder. 

The  instrument  being  dishonored  in  the  hands  of  an  agent,  if 
the  latter  gives  notice  to  his  principal  he  must  do  so  within  the 
time  required  if  he  were  the  holder,  and  the  principal,  on  receipt 
of  such  notice,  has  himself  the  same  time  for  giving  notice  as  if 
the  agent  had  been  an  independent  holder.^^  This  provision  is 
identical  with  the  provisions  of  the  English  Bills  of  Exchange  Act, 
under  which  it  has  been  held  that  where  one  branch  of  a  country 
bank  sent  a  customer's  bill  to  a  London  bank  for  presentment, 
and,  on  the  day  after  dishonor,  the  London  bank  sent  notice  by 
post  to  a  branch  of  the  country  bank  other  than  the  branch  from 
which  it  received  the  bill,  but  on  the  next  day,  on  discovering  the 
mistake,  telegraphed  notice  to  such  branch,  the  notice  was  suf- 
ficient to  bind  an  indorser.^^ 


Place  Where  Notice  Must  Be  Sent. 

§  234.  Where  a  party  has  added  an  address  to  his  signature,  no- 
tice of  dishonor  must  be  sent  to  that  address ;  but  if  he 
has  not  given  such  address,  then  the  notice  must  be 
sent  as  follows: 

166;  Warren  v.  Gillman,  17  Me.  360;  McNeil  v.  Wyatt,  22  Tenn.  (3 
Humph.)    125. 

60Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or.,  Pa., 
Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  94);  Ariz.  (§  3397);  111. 
(§  93);  Kan.  (§  101);  Md.  (§  113);  Mich.  (§  96);  Neb.  (§  93);  N.  Y. 
(§   165);  Ohio  (§  3174-1);  R.  L  (§  102);  Wis.  (§  1678-24). 

eiAct  1882  (45  &  46  Vict.  c.  61,  §  49,  subd.  13).  Fielding  &  Co.  v.  Corry 
[1898]  1  Q.  B.  268. 


300  NOTICE  OF  DISHONOR.  §  235 

1.  Either  to  the  post  office  nearest  to  his  place  of  res- 
idence, or  to  the  post  office  where  he  is  accustomed 
to  receive  his  letters ;  or 

2.  If  he  live  in  one  place,  and  have  his  place  of  business 
in  another,  notice  may  be  sent  to  either  place ;  or 

3.  If  he  is  sojourning  in  another  place,  notice  may  be 
sent  to  the  place  where  he  is  sojourning. 

§  235.  But  where  the  notice  is  actually  received  by  the  party 
within  the  time  specified  in  this  act,  it  will  be  sufficient, 
though  not  sent  in  accordance  with  the  requirements  of 
this  section. 

"Where  a  party  has  added  an  address  to  his  signature,  notice  of 
dishonor  must  be  sent  to  that  address ;  ^^  but  if  he  has  not  given 
such  address,  then  notice  must  be  sent  cither  to  the  post  office 
nearest  to  his  place  of  residence,  or  to  the  one  where  he  is  accus- 
tomed to  receive  his  letters.*"^     When  the  indorser  lives  in  the 

62Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl,  Or.,  Pa., 
Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  108);  Ariz.  (§  3411);  111. 
(§  107);  Kan.  (§  115);  Md.  (§  127);  Mich.  (§  110);  Neb.  (§  107);  N.  Y. 
(§  179);  Ohio  (§  3174z);  R.  I.  (§  116);  Wis.  (§  1678-38). 

Farmers'  &  Merchants'  Bank  v.  Battle,  23  Tenn.  (4  Humph.)  86.  But 
see  Davenport  v.  Gilbert,  17  N.  Y.  Super.  Ct.  (4  Bosw.)  532,  19  N.  Y. 
Super.  Ct.  (6  Bosw.)  179,  and  Bartlett  v.  Robinson,  39  N.  Y.  187,  where 
addressing  a  letter  generally  to  the  indorser  in  the  "City  of  New  York" 
was  not  sufficient,  the  address  under  the  signature  of  the  indorser  having 
been  more  definite. 

63Same  subdivision  and  sections  of  negotiable  instruments  laws  as  last 
above  cited. 

Jones  V.  Lewis,  8  Watts  &  S.  (Pa.)  14;  Mohlman  v.  McKane,  60  App. 
Div.  546,  69  N.  Y.  Supp.  1046.  Service  of  notice  of  dishonor  is  not  shown 
by  the  mere  testimony  of  the  notary  that,  not  knowing  the  address  of  the 
indorser,  he  enclosed  the  notice  of  dishonor  to  a  subsequent  indorser 
with  postage  for  forwarding  the  same  to  the  prior  indorser,  the  latter 
testifying  that  he  never  received  it.  Fuller  Buggy  Co.  v.  Waldron,  112 
App.  Div.  814,  99  N.  Y.  Supp.  561.  Knowing  city  wheie  indorser  resided 
held  insufificient  to  send  notice  addressed  to  indorser  care  of  maker.     E. 


_§235  PLACE  SENT.  301 

country  and  his  post  ofSce  address  is  not  known  to  the  holder,  it 
is  the  duty  of  the  latter  to  make  reasonable  inquiries  in  the  town 
or  city  where  the  bill  is  payable,  and,  in  default  of  more  specific 
information,  to  address  the  notice  to  the  nearest  post  office.^*  But 
the  holder  is  not  justified,  in  all  eases,  in  sending  the  notice  to 
the  nearest  post  office.  He  must  act  in  good  faith  always  and 
with  reasonable  diligence  to  learn  the  place  where  the  indorser 
receives  his  mail,  and,  learning  it,  must  send  the  notice  there,  re- 
gardless of  whether  it  be  the  nearest  post  office.^^ 

If  tbe  person  to  be  notified  live  in  one  place,  and  have  his  place 
of  busi:iess  in  another,  notice  may  be  sent  to  either.^^  If  such 
per.'son  is  staying,  or,  as  the  negotiable  instruments  laws  express 
it,  is  "sojourning,"  in  a  place  other  than  his  customary  place  of 
residence  or  business,  the  notice  may  be  sent  to  such  place.^'^  But 
the  stability  of  residence  required  under  the  law  relating  to  tax- 
ation and  the  settlement  of  paupers  is  not  necessary  when  as- 
certaining the  abode  of  an  indorser  for  the  pui-pose  of  giving  no- 
tice to  liim  by  mail  of  the  dishonor  of  commercial  paper.^^ 

Actual  receipt  is  sufficient,^^^ 

I.  Dupont  de  Nemour  Powder  Co.  v.  Rooney,  63  IMisc.  344,  117  N.  Y. 
Supp.  220. 

eiVogel  V.  Starr,  132  Mo.  App.  430,  112  S.  W.  27. 

65Vogel  V.  Starr,  132  Mo.  App.  430,  112  S.  W.  27.  Where  notary  made 
inquiries  of  several  persons,  etc.,  and  sent  notice  to  wrong  town,  held 
notice  was  sufficient.  Id. 

66Subdivision  2,  same  sections  of  negotiable  instruments  laws  as  last 
above  cited. 

Bank  of  Columbia  v.  Lawrence,  26  U.  S.  (1  Pet.)  578,  7  Law.  Ed.  707; 
Simms  V.  Larkin,  19  Wis.  390;  Phillips  v.  Alderson,  24  Tenn.  (5  Humph.) 
403. 

^^Subdivision  3,  same  sections  of  negotiable  instruments  laws  as  last 
above  cited. 

Williams  v.  Bank  of  United  States,  27  U.  S.  (2  Pet.)  96,  7  Law.  Ed.  30. 
But  see  Wachusett  Nat.  Bank  v.  Fairbrother,  148  Mass.  181,  19  N.  E. 
345,   12  Am.  St.  Rep.  530. 

esLowell  Trust  Co.  v.  Pratt,  183  Mass.  379,  67  N.  E.  363. 
68aSame  section  negotiable  instruments  laws  as  last  above  cited. 


302  NOTICE  OF  DISHONOR.  §236 

Dispensing  With,  Waiver  of  and  Excuses  for  Delay  in  Giving 

Notice. 

§  236.  Notice  of  dishonor  is  dispensed  with  when,  after  the  ex- 
ercise of  reasonable  diligence,  it  cannot  be  given  to  or 
does  not  reach  the  parties  sought  to  be  charged. 

§  237.  Where  due  notice  of  dishonor  by  nonacceptance  has  been 
given,  notice  of  a  subsequent  dishonor  by  nonpayment 
is  not  necessary,  unless  in  the  meantime  the  instrument 
has  been  accepted. 

As  the  general  rule  of  the  law  merchant  and  of  the  negotiable 
instruments  act  requires  notice,  the  failure  to  give  notice  is  dis- 
pensed with  only  in  the  cases  enumerated  therein,^^  and  the  bur- 
den is  on  the  party  claiming  under  the  negotiable  instrument  to 
excuse  the  failure  to  give  notice  within  the  provisions  of  this 
section.'^o  Notice  of  dishonor  may  be  dispensed  with  when,  after 
the  exercise  of  reasonable  diligence,  it  cannot  be  given  to,  or  does 
not  reach,  the  parties  sought  to  be  charged.'''^  What  constitutes 
"reasonable  diligence"  is  a  question  to  be  decided  on  the  facts 
of  each  case.''^  But  there  being  no  controversy  over  the  material 
facts,  the  question  whether  a  notary  exercised  reasonable  dili- 

69Cassell  V.  Regierer,  114  N.  Y.  Supp.  601. 

70Cassell  v.  Regierer,  114  N.  Y.  Supp.  601.  The  mere  fact  of  dishonor 
is  not  of  itself  sufficient  to  dispense  with  the   requirement  of  notice.   Id. 

'^iNeg.  Inst.  Laws  Colo.,  Conn.,  D.  C.,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Old.,  Or.,  Pa., 
Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  112);  Ariz.  (§  3415);  111. 
(§  111);  Kan.  (§  119);  Md.  (§  131);  Mich.  (§  114);  Neb.  (§  111);  N.  Y. 
(§  183);  Ohio  (§  3175c);  R.  I.   (§  120);  Wis.   (§  1678-42). 

720n  the  question  of  reasonable  diligence,  see  Gawtry  v.  Doane,  51 
N.  Y.  84;  Bank  of  Utica  v.  Bender,  21  Wend.  (N.  Y.)  643,  34  Am.  Dec. 
281;  Shepard  v.  Citizens'  Ins.  Co.,  8  Mo.  272.  Looking  for  name  in  city 
directory,  without  other  inquiry,  is  not  reasonable  diligence.  Cumming 
V.  Roderick,  28  App.  Div.  253,  51  N.  Y.  Supp.  1053;  Bacon  v.  Hanna, 
137  N.  Y.  379,  33  N.  E.  303,  20  L.  R.  A.  495,  afg.  17  N.  Y.  Supp.  430; 
Lawrence  v.  Miller,  16  N.  Y.  235;  Baer  v.  Leppert,  12  Hun  (N.  Y.) 
516.     A  state  of  war  excuses  notice  if  sufficient  to  prevent  the  conduct 


§240  WAIVER   OF.  303 

gence  in  giving  a  notice  of  dishonor  to  an  indorscr  is  a  question 
of  law.'^  The  fact  that  the  principal  obligor  is  dead  does  not  re- 
lieve the  holder  from  the  duty  to  give  notice  to  the  indorserJ* 
Notice  of  dishonor  by  nonpayment  is  also  dispensed  with  where 
due  notice  of  a  prior  dishonor  by  nonacceptance  has  been  given, 
unless  in  the  meantime  the  instrument  has  been  accepted.'^^ 

§  238.  Notice  of  dishonor  may  be  waived,  either  before  the  time 
of  giving  notice  has  ajrrived,  or  after  the  omission  to 
give  due  notice,  and  the  waiver  may  be  express  or  im- 
plied. 

§  239.  A  waiver  of  protest  is  deemed  to  be  a  waiver  of  notice  of 
dishonor. 

§  240.  Where  the  waiver  is  embodied  in  the  instrument  itself,  it 
is  binding  upon  all  parties ;  but  where  it  is  written  above 
the  signature  of  an  indorser,  it  binds  him  only. 

Notice  of  dishonor  may  be  waived  '^^  either  before  the  time  for 
giving  notice  has  arrived,  or  after  the  omission  to  give  due  no- 

of  business  through  the  mails.  Morgan  v.  Bank  of  Louisville,  67  Ky.  (4 
Bush)  82;  House  v.  Adams,  48  Pa.,  261,  86  Am.  Dec.  588. 

73Vogel  V.  Starr,  132  Mo.  App.  430,  112  S.  W.  27. 

74Reed  v.  Spear,  107  App.  Div.  144,  94  N.  Y.  Supp.  1007. 

75Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C.,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or.,  Pa., 
Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  116);  Ariz.  (§  3419);  111. 
(§  115);  Kan.  (§  123);  Md.  (§  135);  Mich.  (§  118);  Neb.  (§  115);  N.  Y. 
(§  187);  Ohio  (§  3175g);  R.  I.  (§  124);  Wis.  (§  1678-46). 

''SNeg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or.,  Pa., 
Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  109);  Ariz.  (§  3412);  111. 
(§  108);  Kan.  .(§  116);  Md.  (§  128);  Mich.  (§  111);  Neb.  (§  108);  N.  Y. 
(§  180);  Ohio  (§  3175);  R.  I.  (§  117);  Wis.  (§  1678-39). 

Toole  V.  Crafts,  193  Mass.  110,  78  N.  E.  775,  118  Am.  St.  Rep.  455.  Ex- 
pressly or  impliedly.     Torbert  v.   Montague,  38  Colo.  325,  87  Pac.   1145; 
Stanley  v.  McElrath,  86  Cal.  449,  25  Pac.  16,  10  L.  R.  A.  545. 
See,  also,  Robinson  v.  Barnett,  19  Fla.  670,  45  Am.  Rep.  24. 


;j04  NOTICE  OF  DISHONOR.  §  240 

tice,'^'^  and  the  waiver  may  be  express  or  implied,'''^  for  the  statute 
has  not  changed  the  law  respecting  waiver,'^^  and  having  knowledge 
of  the  facts,  ignorance,  in  the  absence  of  fraud,  of  their  legal 
effect,  as  releasing  him  from  liability,  does  not  save  him  from  the 
consequences  of  the  waiver.^'' 

A  promise  to  pay  made  by  an  indorser  after  dishonor,  and  with 
knowledge  that  he  had  been  released  by  a  failure  to  give  him  no- 
tice of  dishonor,  is  a  waiver  of  such  notice.^^  A  waiver  of  protest 
is  deemed  to  be  a  waiver  of  notice  of  dishonor.^^ 

Parties  affected.. 

Where  the  waiver  is  embodied  in  the  instrument,  it  is  binding 

'i"'Same  sections  of  negotiable  instruments  laws  as  last  above  cited. 

Barclay  v.  Weaver,  19  Pa.  396,  57  Am.  Dec.  661. 

''SSame  sections  of  negotiable  instruments  laws  as  last  above  cited. 

Baumeister  v.  Kuntz,  53  Fla.  340,  42  So.  886.  Indorser  giving  check 
For  dishonored  note  held  to  waive  failure  to  give  notice.  Weil  v.  Corn 
Exchange  Bank,  63  Misc.  300,  116  N.  Y.  Supp.  665. 

An  express  waiver  may  be  by  parol.  Porter  v.  Kemball,  53  Barb. 
(N.  Y.)  467;  Worden  v.  Mitchell,  7  Wis.  161.  For  cases  on  implied 
waiver,  see  Markland  v.  McDaniel,  51  Kan.  350,  32  Pac.  1114,  20  L.  R.  A. 
96;  Seiger  v.  Second  Nat.  Bank,  132  Pa.  307,  19  Atl.  217.  Implied  waiver 
v/here  indorser  was  president  of  corporation  and  participated  in  having 
latter  adjudged  a  bankrupt.  W.  O'Bannon  Co.  v.  Cur  ran,  113  N.  Y.  Supp. 
359.  Taking  security  or  indemnity  sufficient  to  cover  liability  as  im- 
plied waiver,  see  Brandt  v.  Mickle,  28  Md.  436;  Durham  v.  Price,  13  Tenn. 
(5  Yerg.)  300,  26  Am.  Dec.  267;  Secord  v.  Miller,  13  N.  Y.  55;  Whittier 
V.  Collins,  IS  R.  I.  44,  23  Atl.  39;  Denny  v.  Palmer,  27  N.  C.  (5  Ired.)  610; 
Wilson  V.  Senier,   14  Wis.  380;  Armstrong  v.   Chadwick,   127   Mass.   156. 

79First  Nat.  Bank  v.  Gridley,  112  App.  Div.  398,  98  N.  Y.  Supp.  445. 

soToole  V.  Crafts,  193  Mass.  110,  78  N.  E.  775,  118  Am.  St.  Rep.  455. 

siHobbs  V.  Straine,  149  Mass.  212,  21  N.  E.  365. 

82Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or.,  Pa., 
Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  111);  Ariz.  (§  3414);  111. 
(§  110);  Kan.  (§  118);  Md.  (§  130);  Mich.  (§  113);  Neb.  (§  110);  N.  Y. 
(§  182);  Ohio  (§  3175b);  R.  L  (§  119);  Wis.   (§  1678-41). 

Bank  of  Montpelier  v.  Montpelier  Lumber  Co.  (Idaho)   102  Pac.  685. 


§241  EXCUSABLE  DELAY.  305 

on  all  parties;  ^3  jj^^  where  it  is  written  above  the  signature  of 
an  indorser,  it  binds  him  only.^* 

§  241.  Delay  in  giving  notice  of  dishonor  is  excused  when  the 
delay  is  caused  by  circumstances  beyond  the  control  of 
the  holder  and  not  imputable  to  his  default,  misconduct 
or  negligence.  When  the  cause  of  delay  ceases  to  operate, 
notice  must  be  given  with  reasonable  diligence. 

Delay  in  giving  notice  of  dishonor  is  excused  when  caused  by 
circumstances  beyond  the  control  of  the  holder,  and  not  imput- 
able to  his  default,  misconduct  or  negligence.^^  When  the  cause 
of  delay  ceases  to  operate,  notice  must  be  given  with  reasonable 
diiig-ence.^^ 


83Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or.,  Pa., 
Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  110);  Ariz.  (§  3413);  111. 
(§  109);  Kan.  (§  117);  Md.  (§  129);  Mich.  (§  1121);  Neb.  (§  109);  N.  Y. 
(§  181);   Ohio   (§  3175a);   R.   I.   (§  118);   Wis.    (§  1678-40). 

Iowa  Val.  State  Bank  v.  Sigstad,  96  Iowa,  491,  65  N.  W.  407;  Bryant  v. 
Merchants'  Bank,  71  Ky.  (8  Bush)  43. 

8*Same  sections  of  negotiable- instruments  laws  as  last  above  cited. 

Central  Bank  v.  Davis,  36  Mass.  (19  Pick.")  373.  But,  contra,  see  Parsh- 
ley  V.  Heath,  69  Me.  90,  31  Am.  Rep  246.  A  waiver  printed  on  the  back 
of  the  instrument  binds  the  payee  indorsing  on  another  part  of  the  in- 
strument.   Farmers'  Bank  v.  Ewing,  78  Ky.  264,  39  Am    Rep.  231. 

85Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or.,  Pa., 
Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  113);  Ariz  (§  3416);  111. 
(§  112);  Kan.  (§  120);  Md.  (§  132);  Mich.  (§  115);  Neb.  (§  112);  N.  Y. 
(§  184);  Ohio  (§  3175o);  R.  I.  (§  121);  Wis.  (§  1678-43). 

An  ambiguous  signature  by  an  indorser,  causing  notice  to  be  improper- 
ly addressed,  is  an  excuse  for  a  delay  of  several  days.  Manufacturers' 
&  Traders'  Bank  v.  Hazard,  30  N.  Y.  226.  Existence  of  malignant  disease 
is  an  excuse  for  delay.  Hanauer  v.  Anderson,  84  Tenn.  (16  Lea)  340; 
Tunno  v.  Lague,  2  Johns.  Cas.  (N.  Y.)  1,  1  Am.  Dec.  14.  War  is  also  an 
excuse.     See  cases  cited  in  note  72,  infra. 

86Same  sections  of  negotiable  instruments  laws  as  last  above  cited. 

Harden  v.  Boyce,  59  Barb.  (N.  Y.)  425;  Farmers'  Bank  of  Virginia  v. 
Gummell,  26  Grat.  (Va.)  131;  Bank  of  Old  Dominion  v.  McVeigh,  29 
Grat.  (Va.)  546. 

Opp. — SeL— 20 


306  NOTICE  OF  DISHONOR.  §  242 

Effect  of  Omission  to  Give  Notice. 

§  242.  An  omission  to  give  notice  of  dishonor  by  nonacceptance 
does  not  prejudice  the  rights  of  a  holder  in  due  course 
subsequent  to  the  omission. 

An  omission  to  give  notice  of  dishonor  by  nonacceptance  does 
no  prejudice  the  rights  of  a  holder  in  due  course  subsequent  to 
the  omission.^'^  The  Wisconsin  negotiable  instruments  law  adds 
to  this  rule  a  proviso  that  it  shall  not  be  construed  to  revive  any 
liability  discharged  by  such  omission.^^ 

87Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or.,  Pa., 
Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  117);  Ariz.  (§  3420);  111. 
(§  116);  Kan.  (§  124);  Md.  (§  136);  Mich.  (§  119);  Neb.  (§  116);  N.  Y. 
(§  188);  Ohio  (§  3175h);  R.  I.  (§  125);  Wis.  (§  1678-47). 

88  Negotiable    Inst.    Law,    §  1678-47. 


CHAPTER  XV. 

FORGERY  AND  ALTERATION. 

§  243.  Forged  or  Unauthorized  Signature. 

§  244.  Effect  of  Alteration. 

§  245.  Bona  Fide   Holders. 

§  246.  What  Alterations  Are  Material. 

§  247.  Same. 

§  248.  Presumptions  and  Burden  of  Proof. 

Forged  or  Unauthorized  Signature, 

§  243.  Where  a  signature  is  forged  or  made  without  the  author- 
ity of  the  person  whose  signature  it  purports  to  be,  it  is 
wholly  inoperative,  and  no  right  to  retain  the  instrument, 
or  to  give  a  discharge  therefor,  or  to  enforce  payment 
thereof  against  any  party  thereto,  can  be  acquired 
through  or  under  such  signature,  unless  the  party,  against 
whom  it  is  sought  to  enforce  such  right,  is  precluded 
from  setting  up  the  forgery  or  want  of  authority. 

"Where  a  signature  is  forged  or  made  without  authority  of  the 
person  whose  signature  it  purports  to  be,  it  is  wholly  inoperative, 
and  no  right  to  retain  the  instrument,  or  to  give  a  discharge  there- 
for, or  to  enforce  payment  thereof,  against  any  party  thereto, 
can  be  acquired  through  or  under  such  signature,  unless  the  party 
against  whom  enforcement  is  sought  is  precluded  from  setting 
up  the  forgery  or  want  of  authority.^  It  is  the  forged  or  unau- 
thorized signature  that  is  declared  to  be  inoperative,  and  the  in- 

iNeg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or.,  Pa., 
Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  23);  Ariz.  (§  3326);  111.  (§  23); 
Kan.  (§  30);  Md.  (§  42);  Mich.  (§  25);  Neb.  (§  23);  N.  Y.  (§  42);  Ohio 
(§  3171v);  R.  L  (§  31);  Wis.  (§  1675-23). 

307 


303  FORGERY   AND   ALTERATION.  §  2io 

hibitory  clause  forbids  recovery  on  the  instrument  as  against  any 
party  where  the  right  of  recovery  is  predicated  on  such  inop- 
erative signature.  Stated  in  another  Avay,  the  forged  or  unau- 
thorized signature  cannot  be  made  the  basis  of  any  right  against 
any  party  to  the  instrument  on  which  such  signature  appears,^ 
The  fact  that  signatures  to  notes  are  forged  does  not  preclude 
an  action  on  the  indorsements  and  guaranties  of  the  notes,  the 
statutory  provision  being  inaplicable  as  the  actions  are  not 
brought  on  the  notes.^  That  no  rights  can  be  acquired  by  a  bona 
tide  or  other  holder,  under  a  forged  signature  as  against  the  per- 
son whose  name  is  forged,  in  tlie  absence  of  an  estoppel  or  of  an 
adoption  of  the  signature,  is  a  settled  rule  of  law.^  If  the  payee 
named  in  a  check  is  a  fictitious  person,  the  indorsement  of  such 
name  thereon  by  the  person  cashing  the  same  is  a  forgery.^  An 
indorsement  made  by  one  falsely  representing  himself  to  be  the 
payee  transfers  no  title,  though  paper  was  delivered  to  him  by 
maker  under  the  impression  that  he  was  in  reality  the  party 
named  as  payee,^  but  this  would  not  be  true,  especially  against  a 
bona  fide  holder,  if  such  person,  though  falsely  representing  his 
identity,  is  the  person  for  whom  the  instrument  was  in  fact  in- 

2Been  v.  Farrell,  135  Iowa,  670,  113  N.  W.  509.  A  bank  which  has 
collected  a  draft  "from  the  drawee  upon  which  the  payee's  indorsement 
is  forged  cannot  retain  the  money  as  it  had  no  title  to  the  draft.  Sea- 
board Nat.  Bank  v.  Bank  of  America,  193  N.  Y.  26,  85  N.  E.  829,  afg  51 
Misc.  103,  100  N.  Y.  Supp.  740,  and  118  App.  Div.  907,  103  N.  Y.  Supp.  1141. 

3State  V.  Corning  State  Sav.  Bank,   139  Iowa,  338,   115  N.  W.  937. 

*Mersman  v.  Werges,  3  Fed.  378;  Miers  v.  Coates,  57  111.  App.  216; 
Buitler  V.  Cams,  37  Wis.  61.  See,  also.  Booth  v.  Powers,  56  N.  Y.  22; 
Camp  V.  Carpenter,  52  Mich.  375,  18  N.  W.  113.  A  person  whose  name  was 
forged  as  an  indorser  is  not  liable  as  such  to  a  bona  fide  holder.  Citi- 
zens' State  Bank  v.  Adams,  91  Ind.  280;  Rowe  v.  Putnam,  131  Mass.  281; 
Roach  V.  Woodall,  91  Tenn.  206,  18  S.  W.  407,  30  Am.  St.  Rep.  883; 
Terry  v.  Allis,  16  Wis.  478,  504,  20  Wis.  32,  35. 

^Harmon  v.  Old  Detroit  Nat.  Bank,  lS3  Mich.  73,  15  Det.  Leg.  N.  376, 
.  116  N.  W.  617,  126  Am.  St.  Rep.  467,  17  L.  R.  A.  (N.  S.)  514. 

6Tolman  v.  American  Nat.  Bank,  22  R.  I.  462,  48  Atl.  480,  84  Am.  St. 
Rep.  850,  55  L.  R.  A.  877. 

7Jamieson  &  McFarland  v.  Heim,  43  Wash.  153,  86  Pac.  165. 


§  2i3  FORGERY.  300 

tended."^  The  unautliorized  diversion,  by  an  agent,  of  checks  after 
indorsement,  does  not  make  such  indorsement  a  forgery .^ 

Logically,  a  forged  signature  is  not  capable  of  ratification,  but 
may  be  adopted  by  the  person  whose  name  was  used.  The  word 
''ratification"  is  used,  however,  in  the  decisions,  and  it  has  been 
held  that  a  ratification  may  take  place,  though  there  was  no 
agency  or  facts  creating  an  estoppel  in  pais,^  and  no  new  consid- 
eration.io  Eatification  or  adoption  of  the  signature  may  take 
place  where  the  proceeds  of  the  instrument  are  used  with  knowl- 
edge of  the  forgery ,11  or  where  the  person  whose  name  was  forged 
accepts  a  conveyance  or  deed  of  trust  as  security  or  indemnity ;  ^ 
but  mere  silence  is  not  sufficient.!^ 

One  who  signs  as  surety  below  the  signature  of  other  ostensible 
sureties  cannot  show  as  against  a  bona  fide  holder  that  the  prior 
signatures  were  forged  ;i*  nor  can  one  who  negotiates  an  instru- 
ment by  delivery  or  by  qualified  indorsement  set  up  forgery 
against  his  immediate  transferee,  for,  by  thus  negotiating  it,  he 
warrants  that  it  is  genuine ;  ^^  nor  can  an  acceptor  set  up  forgery 

sSalem  v.  Bank  of  State  of  New  York,  110  App.  Div.  636,  97  N.  Y. 
Supp.  361. 

OGreenfield  Bank  v.  Crafts,  86  Mass.  (4  Allen)  447;  Wellington  v. 
Jackson,  121  Mass.  157.  A  ratification  of  a  forged  signature  is  binding. 
Central  Nat.  Bank  v.  Copp,  184  Mass.  328,  68  N.  E.  334. 

lOHoward  v.  Duncan,  3  Lans.  (N.  Y.)  174.  But  see  criticism  of  holding 
in  Hood  v.  Nichols,  3  Alb.  Law  J.  331,  1  Wkly.  Law  Bui.  227,  and  Work- 
man V.  Wright,  33  Ohio  St.  405,  3rAm.  Rep.  546,  in  which  it  was  held 
that  a  forged  note  is  void  ab  initio  and  incapable  of  ratification. 

iiBallston  Spa  Bank  v.  Marine  Bank,  16  Wis.   120. 

i2Fitzpatrick  v.  School  Com'rs,  26  Tenn.  (7  Humph.)  224,  46  Am.  Dec. 
76;  Jones  v.  Hamlet,  34  Tenn.  (2  Sneed)  256;  Bell  v.  Waudby,  4  Wash.  743. 

isCalifornia  Bank  v.  Sayre,  85  Cal.  102,  24  Pac.  713;  DeLand  v.  Dixon 
Nat.  Bank,  111  111.  323.  Especially  where  the  party  sought  to  be  charged 
did  not  know  of  the  unauthorized  use  of  his  name  until  after  maturity  of 
the  instrument.  Walters  v.  Munroe,  17  Md.  150.  And  see  Traders'  Nat. 
Bank  v.  Rogers,  167  Mass.  315,  45  N.  E.  923,  57  Am.  St.  Rep.  458,  36  L. 
R.  A.  539. 

i4Selser  v.  Brock,  3  Ohio  St.  303. 

iSNeg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or..  Pa., 
Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  65);  Ariz.  (§  3368);  111.  (§  65); 


310  FORGERY  AND  ALTFRATION.  §  24'1 

because,  by  his  acceptance,  he  admits  the  existence  of  the  drawer 
and  the  genuineness  of  his  signature.^^  An  estoppel  may  be  cre- 
ated by  negligence,"  or  by  admitting  that  the  signature  is  gen- 
uine,^^  or  by  such  admission,  coupled  with  a  promise  to  pay, 
whereby  the  holder  is  induced  to  abandon  his  remedy  against 
other  parties,!^  or  by  a  representation  to  a  prospective  purchaser 
that  he  may  safely  buy  the  instrument-^" 

Effect  of  Alterations. 

§  244.  Where  a  negotiable  instrument  is  materially  altered  with- 
out the  assent  of  all  parties  liable  thereto,  it  is  avoided, 
except  as  against  a  pajrty  who  has  himself  made,  author- 
ized or  assented  to  the  alteration,  and  subsequent  in- 
dorsers. 

Where  a  negotiable  instrument  is  materially  altered  without  the 
assent  of  all  parties  liable  thereon,  it  is  avoided  except  as  against 
a  party  who  has  himself  made,  authorized,  or  consented  to  the 

Kan.  (§  72);  Md.  (§  84);  Mich.  (§  67);  Neb.  (§  65);  N.  Y.  (§  115); 
Ohio  (§  3173J);  R.  I.  (§  73);  Wis.  (§  1674-5). 

Libtauer  v.  Goldman,  72  N.  Y.  506,  28  Am.  Rep.  171.  And  see  Coolidge 
V.  Brigham,  46  Mass.  (5  Mete.)  68. 

i6Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or.,  Pa., 
Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  62);  Ariz.  (§  3365);  111.  (§  62); 
Kan.  (§  69);  Md.  (§81);  Alich.  (§  64);  Neb.  (§  62);  N.  Y.  (§  112); 
Ohio  (§  3173g);  R.  I.  (§  70);  Wis.  (§  1677-2). 

United  States  Bank  v.  Bank  of  Georgia,  23  U.  S.  (10  Wheat.)  333,  6 
Law.  Ed.  423;  Marine  Nat.  Bank  v.  National  City  Bank,  59  N.  Y.  67, 
17  Am.   Rep.  305. 

i7Leather  Manufacturers'  Bank  v.  Morgan,  117  U.  S.  96,  29  Law.  Ed. 
811.  See,  also.  Woodruff  v.  Munroe,  33  Md.  146;  Wilson  v.  Law,  112 
N.  Y.  536,  20  N.  E.  399.  But  an  innocent  transferee  is  not  chargeable 
with  the  negligence  of  his  transferror  in  failing  to  make  proper  inquiry. 
First  Nat.  Bank  of  Marshalltown  v.  Marshalltown  State  Bank,  107  Iowa, 
327,  n  N.  W.  1045,  44  L.  R.  A.  131. 

iSHefner  v.  Vandolah,  62  111.  483,  14  Am.  Rep.  106. 

WHefner  v.  Dawson,  63  111.  403,  14  Am.  Rep.  123. 

20Crout  V.  De  Wolf,  1  R.  I.  393. 


§  244  ALTERATIONS.  311 

alteration,  and  subsequent  indorsers.^i  It  would  seem  that  this 
authority  may  be  implied.22  The  consent  may  be  by  an  agent.^^ 
"While,  as  between  the  parties,  the  authority  implied  of  law  to 
fill  in  blanks  does  not  aiithorize  material  alterations  in  the  orig- 
inal terms  of  the  notes,^^  still,  the  section  under  consideration  pur- 
ports to  lay  down  a  general  rule  as  to  the  alteration  of  instru- 
ments. It  does  not  purport  to  cover  a  case  where  a  blank  has 
been  negligently  left  or  only  partly  filled  and  the  instrument 
changed  by  filling  in  the  blank.^s  jn  g^ch  case  the  party  negli- 
gently so  making  or  negotiating  the  instrument  is  liable  to  an 
innocent  holder.^^  According  to  the  weight  of  authority  in  this 
country,  a  material  alteration  by  a  stranger,  or  a  spoilation  of  it, 
as  it  is  termed,  will  not  avoid  the  note.  The  contrary  has,  how- 
ever, been  adopted  in  England,^^  and  will  likely  be  adhered  to 
under  the  Bills  of  Exchange  Act.^^  Whether,  therefore,  this  sec- 
tion which  is  copied  from  the  English  act  ^'-^  should  receive  the 
same  construction  as  that  placed  upon  it,  or  likely  to  be  placed 
upon  it,  in  England,  is  a  matter  for  serious  consideration.  In 
this  connection  it  would  seem  not  unreasonable  to  suppose  that 
it  was  the  intention  of  the  framers  of  the  American  act  that  it 

2iNeg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or..  Pa., 
Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  124);  Ariz.  (§  3427);  111. 
(§  123);  Kan.  (§  131);  Md.  (§  143);  Mich.  (§  126);  Neb.  (§  123);  N.  Y. 
(§  205);  Ohio  (§  3175o);  R.  I.  (§  132);  Wis.  (§  1679-5). 

See  Taddiken  v.  Cantrell,  69  N.  Y.  597,  25  Am.  Rep.  253;  Stewart  v. 
First  Nat.  Bank,  40  Mich.  348. 

22First  Nat.  Bank  of  Wilkes-Barre  v.  Barnum,  160  Fed.  245. 

23Luckenbach  v.  McDonald,  164  Fed.  296. 

24'Where  one  indorsed  printed  form  of  a  note  in  which  the  date,  amount, 
and  time  of  payment  were  all  blank,  held  the  maker  was  not  authorized 
to  change  face  as  printed  on  form.  First  Nat.  Bank  of  Wilkes-Barre  v. 
Barnum,  160  Fed.  245. 

25National  Exchange  Bank  v.  Lester,  119  App.  Div.  786,  104  N.  Y. 
Supp.  418;  Johnston  v.  Hoover,  139  Iowa,  143,  117  N.  W.  277. 

26Raised  check.  National  Exchange  Bank  v.  Lester,  119  App.  Div.  786, 
104  N.  Y.  Supp.  418. 

27Davidson  v.  Cooper,  11  Mees  &  W.  778,  13  Mees  &  W.  343. 

28Chalmers'  Bills  of  Exchange  (5th  Ed.)  213,  214. 
29Bills  of  Exchange  Act,  §  64,  St.  45  &  46  Vict.  c.  61 


312  FORGERY   Ai\D   ALTERATION.  §  245 

should  De  construed  according  to  the  law  of  this  country  ratlier 
than  that  of  England.3°  It  is  no  defense  to  material  alterations 
in  printed  portions  of  a  note  to  say  that  they  are  in  the  hand- 
writing of  the  maker,  the  same  as  the  rest  of  the  written  parts, 
dispelling  suspicion  and  thereby  doing  away  with  the  necessity 
of  inquiry .2^ 


Rights  of  Bona  Fide  Holders. 


§  245.  But  when  an  instrument  has  been  materially  altered  and 
is  in  the  hands  of  a  holder  in  due  course,  not  a  party  to 
the  alteration,  he  may  enforce  payment  thereof  accord- 
ing to  its  original  tenor. 

"Where  an  instrument  has  been  materially  altered,  and  is  in  the 
hands  of  a  holder  in  due  course,  not  a  party  to  the  alteration,  he 
may  enforce  payment  thereof  according  to  its  original  tenor.^^ 
This  provision  of  the  negotiable  instruments  laws  changes  the 


30Jeffrey  v.  Rosenfeld,  179  Mass.  506,  61  N.  E.  49.  In  Jeffrey  v.  Rosen- 
feld,  179  Mass.  506,  61  N.  E.  49,  the  following  language  is  used:  "We 
should  hestitate  to  say  that  the  efifeot  of  §  124  is  not  only  to  avoid  the 
note  in  case  of  a  material  alteration,  but  to  cancel  the  date  for  which  it 
was  given,  and  to  deprive  a  party  of  the  benefit  of  any  security  that  he 
may  have  taken."  Enforced  against  indorser  according  to  original 
tenor;  maker  made  alteration  in  note  at  request  of  payee  after  indorse- 
ment; plaintiff  a  subsequent  holder.  Colonial  Nat.  Bank  v.  Duerr,  108 
App.  Div.  215,  95  N.  Y.  Supp.  810. 

SiFirst  Nat.  Bank  of  Wilkes-Barre  v.  Barnum,  160  Fed.  245. 

32Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or.,  Pa., 
Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  124);  Ariz.  (§  3427);  111. 
(§  123);  Kan.  (§  131);  Md.  (§  143);  Mich.  (§  126);  Neb.  (§  123);  N.  Y. 
(§  205);  Ohio  (§  3175o);  R.  I.  (§  132);  Wis.  (§  1679-5). 

Thorpe  v.  White,  188  Mass.  333,  74  N.  E.  592;  Bothell  v.  Schweitzer 
(Neb.)  120  N.  W.  1129. 


§245  BONA  FIDE  HOLDERS.  313 

la\v,33  and  is  only  applicable  in  favor  of  a  holder  in  due  course,^^ 
and  does  not  apply  where  note  had  no  iuception,^^  or  where  the 
alteration  is  such  as  to  make  it  impossible  to  enforce  it  accord- 
ing to  its  original  tenor.3<5  The  question  of  negligence  on  the 
part  of  the  maker  is  often  important,  and  it  has  been  held  that  the 
maker  cannot  defend  against  a  bona  fide  holder,  where  he  had 
left  sufficient  space  to  permit  of  an  alteration  without  defacing 
the  instrumcnt.2^  On  this  point,  an  instructive  case  has  been 
decided  under  the  corresponding  provisions  of  the  English  Bills 
of  Exchange  Act,  which  are  identical  with  the  provisions  of  the 
negotiable  instruments  law  just  considered  in  this  section,  and 
in  the  first  paragraph  of  the  preceding  section.  The  action  was 
brought  by  a  bona  fide  holder  against  the  acceptor  of  a  bill  which, 
when  accepted,  was  for  £500,  but  which,  after  acceptance  and  be- 
fore indorsement,  had  been  raised  by  the  drawer  to  £3,500.     It 

33See  Gettysburg  Nat.  Bank  v.  Chisholm,  169  Pa.  564,  32  Atl.  730,  47 
Am.  St.  Rep.  929;  Seebold  v.  Tatlie,  76  Minn.  131,  78  N.  W.  967;  Walsh 
V.  Hunt,  120  Cal.  46,  52  Pac.  115.  In  a  well  considered  Massachusetts 
case,  decided  before  the  negotiable  instruments  law  was  passed  in  that 
state,  it  was  held  that  where  the  maker  of  a  note,  after  it  had  been  in- 
dorsed for  his  accommodation,  raised  the  amount  from  $500  to  $2,000, 
and  discounted  the  note  for  the  latter  sum  with  the  plaintiff  bank,  the 
indorser  was  discharged,  and  was  not  liable  to  the  bank  even  for  the 
original  amount  of  the  note.  Citizens'  Nat.  Bank  v.  Richmond,  121  Mass. 
110. 

•    34First  Nat.  Bank  of  Wilkes-Barre  v.  Barnum,  160  Fed.  245. 

35First  Nat.  Bank  v.  Gridley,  112  App.  Div.  398,  98  N.  Y.  Supp.  445. 

36Name  of  one  of  several  payees  changed  after  only  defendant  payee 
had' indorsed  note.  First  Nat.  Bank  v.  Gridlej^  112  App.  Div.  398,  98 
N.  Y.  Supp.  445. 

37Holmes  v.  Bank  of  Ft.  Gaines,  120  Ala.  493,  24  So.  959;  Weidman 
V.  Symes,  120  Mich.  657,  79  N.  W.  894,  V  Am.  St.  Rep.  603;  Garrard  v. 
Haddan,  67  Pa.  83,  5  Am.  Rep.  412;  Visher  v.  Webster,  13  Cal.  58;  Scot- 
land County  Bank  v.  O'Connel,  23  Mo.  App.  165;  Burch  v.  Daniel,  101  Ga. 
228,  28  S.  E.  622.  In  a  recent  case  where  the  amount  of  the  note  was 
increased,  it  was  held  that  an  accommodation  indorser  was  not  liable 
for  the  increased  amount  to  a  bona  fide  holder,  though  spaces  on  the  note 
rendered  the  alteration  easy,  the  note  being  complete  at  the  time  of  the 
indorsement.  National  Exchange  Bank  v.  Lester,  194  N.  Y.  461,  87  N.  E. 
779,  rvg.  119  App.  Div.  786,  104  N.  Y.  Supp.  418. 


314  FORGERY    AND    ALTERATION.  §246 

appeared  that  at  the  time  of  acceptance  the  figures  500,  preceded 
by  the  sign  "£,"  were  in  the  left  hand  corner  of  the  bill,  but  that 
there  was  space  enough  between  the  sign  and  the  figures  for  the 
insertion  of  another  figure,  and  that  in  the  body  of  the  bill  there 
was  sufficient  blank  space  before  the  written  words  ''five  hundred 
pounds"  for  the  insertion  of  the  words  "three  thousand,"  and 
that  there  was  a  stamp  on  the  bill  larger  than  was  necessary  for 
a  500-pound  bill.  The  court  held  that  the  acceptor  was  not  neg- 
ligent, as  he  was  not  bound  to  anticipate  that  the  bill  would  fall 
into  the  hands  of  a  felonious  person,  who  might  fill  the  spaces, 
and  that,  presupposing  negligence  on  the  part  of  the  acceptor, 
no  estoppel  arose  as  against  him  because  the  felonious  act  of  the 
forger  intervened  between  such  negligence  and  the  indorsement 
to  the  holder.2s  It  is  gross  negligence  to  sign  an  instrument  hav- 
ing an  important  clause  affecting  the  signer's  liability  written 
in  pencil,  and,  in  case  the  clause  is  erased,  it  has  been  held  that  a 
bona  fide  holder  may  recover  on  the  instrument  as  it  was  when 
he  received  it.^^  Under  the  negotiable  instruments  laws,  the  hold- 
er in  this  case  would  be  permitted  to  recover  only  according  to 
the  original  tenor  of  the  instrument.  An  alteration  by  detach- 
ing a  part  of  the  instrument  which  had  been  so  executed  that  it 
could  be  detached  without  injury  to  the  remainder  of  the  instru- 
ment is  no  defense  against  a  bona  fide  holder.*^ 

What  Alterations  are  Material.. 


§  246.    Any  alteration  which  changes : 

1.  The  date; 

2.  The  sum  payable,  either  for  principal  or  interest; 

3845  &  46  Vict.  c.  61,  §  64.  Scholfield  v.  Earl  of  Londesborough  [1895] 
1  Q.  B.  536.  See,  also,  Blakey  v.  Johnson,  76  Ky.  (13  Bush)  197,  26  Am. 
Rep.  254. 

39Harvey  v.  Smith,  55  111.  224. 

40Elliott  V.  Levings,  54  111.  213;  Woolen  v.  Ulrich,  64  Ind.  120;  Zim- 
merman V.  Rote,  75  Pa.  188;  Brown  v.  Reed,  79  Pa.  370,  21  Am.  Rep. 
75.     But  see  Scoiield  v.  Ford,  56  Iowa,  370,  citing  Benedict  v.  Cowden, 


§  247  MATERIAL   ALTERATIONS.  Slf, 

3.  The  time  or  place  of  payment ; 

4.  The  number  or  the  relations  of  the  parties; 

5.  The  medium  of  currency  in  which  payment  is  to  be 
made. 

§  247.  Or  which  adds  a  place  of  payment  where  no  place  of 
payment  is  specified,  or  any  other  change  or  addition 
which  alters  the  effect  of  the  instrument  in  any  respect, 
is  a  material  alteration. 

Any  alteration  is  material  which  changes  the  date,^^  the  sum 
payable  either  for  principal  or  interest/-  the  time  or  place  of 
payment/^  the  number  or  relation  of  the  parties/*  and  the  medium 

49  N.  Y.  396,  10  Am.  Rep.  382,  where  the  authorities  are  collected  and 
discussed. 

4iNeg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or.,  Pa., 
Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  125);  Ariz.  (§  3428);  111. 
(§  124);  Kan.  (§  132);  Md.  (§  144);  Mich.  (§  127);  Neb.  (§  124);  N.  Y. 
(§  206);  Ohio  (§  3175p);  R.  I.  (§  133);  Wis.  (§  1679-6). 

McCormick  Harvesting  Mach.  Co.  v.  Lauber,  7  Kan.  App.  730,  52 
Pac.  577;  McMillan  v.  Hefiferlin,  18  Mont.  385,  45  Pac.  548;  Low  v.  Mer- 
rill, 1  Pin.  (Wis.)  340;  Wyman  v.  Yeomans,  84  111.  403;  Inglish  v.  Bren- 
eman,  5  Ark.  Zll ,  41  Am.  Dec.  96;  Britton  v.  Dierker,  46  Mo.  591,  2  Am. 
Rep.  553.  An  innocent  change  of  date  made  by  the  payee,  from  August 
11th  to  August  12th,  though  material,  did  not  destroy  "the  legal  efficacy 
of  the  note,  and  recovery  may  be  had  upon  it  when  restored."  Wallace 
V.  Tice,  32  Or.  283,  51  Pac.  733. 

42Same  section  of  negotiable  instruments  laws  as  last  above  cited. 

National  Park  Bank  v.  Ninth  Nat.  Bank,  55  Barb.  (N.  Y.)  87;  Batchel- 
der  v.  White,  80  Va.  103;  Wade  v.  Withington,  83  Mass.  (1  Allen)  561; 
Aetna  Nat.  Bank  v.  Winchester,  43  Conn.  391;  Walsh  v.  Hunt,  120  Cal. 
46,  52  Pac.  115,  39  L.  R.  A.  697.  Alterations  as  to  interest,  see  Little 
Rock  Trust  Co.  v.  Martin,  57  Ark.  277,  21  S.  W.  468;  Hurlbut  v.  Hall, 
39  Neb.  889,  58  N.  W.  538;  Lewis  v.  Shepherd,  12  D.  C.  (1  Mackey)  46; 
Lamar  v.  Brown,  56  Ala.  157;  Heath  v.  Blake,  28  S.  C.  406,  5  S.  E.  842; 
Harsh  v.  Kleepef,  28  Ohio  St.  200,  and  cases  cited.  Words  "with  interest 
at  8  %  per  annum  after  due  until  paid"  added.  Colonial  National  Bank  v. 
Duerr,  108  App.  Div.  215,  95  N.  Y.  Supp.  810. 

43Same  sections  negotiable  instruments  laws  last  above  cited. 

Time  of  payment,  see  Seebold  v.  Tatlie,  76  Minn.  131,  78  N.  W.  967. 
Place   of   payment,   see   Adair   v.    Egland,   58   Iowa,   314,    12   N.    W.   211; 


316  FORGERY   AND   ALTERATION.  §247 

or  currency  in  which  payment  is  to  be  made/^  or  which  adds  a 
place  of  payment,  where  no  place  of  payment  is  specified,*^  or 
makes  any  other  change  or  addition  which  alters  the  effect  of  the 
instrument.*''  A  memorandum  or  indorsement  written  on  the 
back  of  a  promissory  note  at  the  time  of  its  expiration  which 
limits  its  consideration,  affects  its  operation,  and  was  intended  to 
be  a  part  of  the  contract,  must  be  regarded  as  a  substantive  part 
of  the  note.'*^  How  strict  the  courts  are  with  regard  to  the  ques- 
tion of  materiality  is  shown  by  the  following  case:  "If  paid  at 
maturity,  the  note,  as  executed,  bore  no  interest,  but,  as  altered, 
8  per  cent,  per  annum  from  the  1st  of  November,  1889,  until  the 
dth  of  the  same  month.     The  difference  is  slight,  but  the  maxim 

Troy  City  Bank  v.  Louman,  19  N.  Y.  477;  First  Nat.  Bank  of  Wilkes- 
Barre  v.  Barnum,  160  Fed.  245. 

44Same    sections    of   negotiable    instruments   laws   as    last    above   cited. 

Change  of  name  of  payee.  Hoffman  v.  Planters'  Nat.  Bank,  99  Va. 
480,  39  S.  E.  134;  Mersman  v.  Werges,  112  U.  S.  139,  28  Law.  Ed.  641; 
Chappell  V.  Spencer,  23  Barb.  (N.  Y.)  584.  The  erasure  of  the  name  of 
the  payee  and  the  substitution  of  another  name  is  a  material  alteration. 
Erickson  v.  First  Nat.  Bank,  44  Neb.  622,  62  N.  W.  1078,  48  Am.  St.  Rep. 
753,  28  L.  R.  A.  577.  Changing  the  word  "order"  to  "bearer"  is  a  material 
alteration.  Belknap  v.  National  Bank  of  North  America,  100  Mass. 
376,  97  Am.  Dec.  105;  Union  Nat.  Bank  v.  Roberts,  45  Wis.  373.  See, 
also,  McDaniel  v.  Whitsett,  96  Tenm.  10,  33  S.  W.  567. 

45Same   sections    of   negotiable    instruments   laws   as    last    above    cited. 

Church  V.  Howard,  17  Hun  (N.  Y.)  5;  Darwin  v.  Rippey,  63  N.  C. 
318;  Wills  V.  Wilson,  3  Or.  308. 

^^Same  sections  negotiable  instruments  laws  last  cited. 

Sturges  V.  Williams,  9  Ohio  St.  443,  75  Am.  Dec.  473;  Southwark  Bank 
V.   Gross,  35  Pa.  8o. 

47Same  sections  of  negotiable  instruments  laws  as  last  above  cited. 

The  erasure  of  an  agreement  to  pay  costs  of  collection  and  attorney's 
fees  is  a  material  alteration.  First  Nat.  Bank  v.  Laughlin,  4  N.  D.  391, 
61  N.  W.  473.  Tracing  over  in  ink  what  was  previously  written  in  pencil 
is  not  an  alteration.  Reed  v.  Roark,  14  Tex.  329,  65  Am.  Dec.  127.  Altera- 
tion lessening  indorsements  of  payment  held  material.  Kurth  v.  Farm- 
ers' &  Merchants'  State  Bank,  11  Kan.  475,  94  Pac.  798,  127  Am.  St.  Rep. 
428,  15  L.  R.  A.   (N.  S.)   612. 

48Kurth  v.  Farmers'  &  Merchants'  State  Bank,  11  Kan.  475,  94  Pac.  798, 
127  Am.  St.  Rep.  428,  IS  L.  R.  A.  (N.  S.)  612. 


§248  BURDEN  OF  PROOF.  317 

*De  minimis  non  curat  lex'  does  not  apply  to  cases  like  this."*^ 
Under  the  general  rule  that  an  alteration,  to  be  material,  "must 
in  some  way  affect  the  legal  rights  of  the  parties  as  they  were  ex- 
pressed before  the  change  was  made,"  it  has  been  held  that  two 
alterations  by  which  a  note,  originally  payable  to  a  bank,  and  sign- 
ed by  two  persons  as  makers,  and  two  as  sureties,  was  first  chang- 
ed by  adding,  under  the  signature  of  the  makers,  the  signature 
of  a  third  person,  who  had  intended  to  sign  as  an  indorser,  and 
was  again  changed  by  making  it  payable  to  such  third  person, 
and  simultaneously  adding  his  indorsement  to  the  bank,  and  a 
guaranty-  by  him  of  paj^ment  of  the  note,  are  immaterial  on  the 
ground  that  the  rights  and  duties  of  the  bank  and  the  makers 
were  precisely  the  same  after  as  before  the  changes.^"^ 

Presumption  and  Burden  of  Proof. 

§  248.  By  the  weight  of  authority,  an  apparent  alteration  is 
presumed  to  have  been  made  at  or  before  delivery  and 
the  burden  of  proving  a  fraudulent  alteration  is  on  the 
party  alleging  it. 

The  decisions  are  not  in  harmony  on  the  questions  of  the  pre- 
sumptions and  burden  of  proof  in  case  of  the  alteration  of  a  ne- 
gotiable instrument;  but  the  weight  of  authority  favors  the  rule 
that  an  apparent  alteration  will  be  presumed  to  have  been  made 
at  or  before  delivery,  and,  consequently,  to  be  a  part  of  the  agree- 
ment of  the  parties.^^  Hence,  the  burden  of  proving  a  fraudu- 
lent alteration  after  delivery  is  on  the  party  alleging  it.^^     Mere 

49Little  Rock  Trust  Co.  v.  Martin,  57  Ark.  277,  21  S.  W.  468. 

soRyan  V.  First  Nat.  Bank  of  Springfield,  148  111.  349,  35  N.  E.  1120. 

CiParamore  v.  Lindsey,  63  Mo.  63;  Stillwell  v.  Patton,  108  Mo.  352, 
18  S.  W.  1075;  Corcoran  v.  Doll,  32  Cal.  82;  Franklin  v.  Baker,  48  Ohio 
St.  296,  27  N.  e;  550,  29  Am.  St.  Rep.  547.  See,  also,  Odell  v.  Gallup, 
62  Iowa,  253,  17  N.  W.  502;  Simpson  v.  Davis,  119  Mass.  269;  Page  v. 
Danaher,  43  Wis.  221;  Byers  v.  Tritch,  12  Colo.  App.  377,  55  Pac.  622; 
Ward  V.  Cheney,  117  Ala.  238,  22  So.  996. 

52Farmers'  Loan  &  Trust  Co.  v.  Olson,  92  Iowa,  770,  61  N.  W.  199; 
Putnam  v.  Clark,  33  N.  J.  Eq.  338. 


318  FORGERY   AND   ALTERATION.  §248 

interlineations  do  not  raise  a  presumption  of  fraudulent  altera- 
tion ;53  j2or  does  the  fact  that  defendant's  signature  had  been 
apparently  erased  or  cancelled,  or  rewritten  over  a  cancellation, 
relieve  plaintiff  of  the  burden  of  proving,  after  a  general  tra- 
verse, that  defendant's  signature  was  on  the  instrument  at  the 
time  of  its  delivery.^^  Material  alterations  being  shown,  however, 
the  burden  is  on  plaintiff  suing  on  a  note  to  show  that  they  were 
made  innocently,  by  a  stranger,  or  for  a  proper  purpose,^^  or  that 
they  were  made  with  the  authority  or  consent  of  the  defendant,^^ 
or  that  they  were  ratified.^'' 

53Maldaner  v.  Smith,  101  Wis.  30,  78  N.  W.  140;  Cox  v.  Palmer,  3  Fed.  16. 

eiBaxter  v.  Camp,  71  Conn.  245,  41  Atl.  803,  71  Am.  St.  Rep.  169,  42 
L.  R.  A.  514. 

65Maguire  v.  Eichmeier,  119  Iowa,  301,  80  N.  W.  395,  and  cases  cited. 
See,  also,  Davis  v.  Crawford   (Tex.  Civ.  App.)    53  S.  W.  384. 

56Emerson  v.  Opp,  9  Ind.  App.  581,  34  N.  E.  840,  37  N.  E.  24;  Glover 
V.  Gentry,  104  Ala.  222,  16  So.  38;  Shroeder  v.  Webster,  88  Iowa,  627, 
55  N.  W.  569. 

67Sneed  v.  Sabinal  Min.  &  Mill.  Co.,  20  C.  C.  A.  230,  73  Fed.  925. 


CHAPTER  XVI. 


PAYMENT  AND  DISCHARGE. 


§  249.     How  Instrument  is  Discharged. 

1.  Payment  to  Holder. 

2.  Cancellation. 

3.  Other  Acts  Discharging  Simple  Contracts  for  the  Payment 

of  Money. 

4.  Principal   Debtor   Becoming  Holder. 

§  250.  Instruments  Payable  at  Bank. 

§  251.  What  Constitutes  Payment. 

§  252.  Instruments  Drawn  in  Sets. 

^  253.  Payment  of  Bills  of  Exchange  for  Honor — Who  May  Make. 

§  254.  Same — Attestation. 

§  255.  Same — Declaration  Before  Payment  for  Honor. 

§  256.  Same — Preference  of  Parties  Offering  to  Pay  for  Honor. 

§  257.  Same — Effect  of  Payment  on  Subsequent  Parties. 

§  258.  Same — Refusal  of   Holder  to   Receive   Payment  for   Honor. 

§  259.  Same — Rights  of  Payer  for  Honor. 

§  260.  Discharge  of  Parties  Secondarily  Liable. 

§  261.  Who  is  Primarily  Liable. 

§  262.  Renunciation. 

§  263.  Effect  of  Pa3'ment  by  Parties  Secondarily  Liable. 

§  264.  Presumptions. 

§  265.  Renewal  of  Liability. 


How  Instrument  Discharged. 

§  249.    A  negotiable  instrument  is  discharged: 

1.  By  payment  made  to  the  holder  of  the  instrument  in 
due  course  by  or  on  behalf  of  the  principal  debtor, 
or  by  the  party  accommodated,  where  the  instrument 
is  made  or  accepted  for  accommodation.  Payment 
is  made  in  due  course  when  it  is  made  at  or  after 
319 


320  PAYMENT  AND   DISCHARGE.  §249 

the  maturity  of  the  instrument  to  the  holder  thereof 
in  good  faith  and  without  notice  that  his  title  is 
defective. 

2.  By  the  intentional  cancellation  thereof  by  the  holder; 
a  cancellation  made  unintentionally,  or  under  a  mis- 
take, or  without  the  authority  of  the  holder,  is  in- 
operative ;  but  where  an  instrument  or  any  signature 
thereon  appears  to  have  been  canceled,  the  burden 
of  proof  lies  on  the  party  who  alleges  that  the  can- 
cellation was  made  unintentionally,  or  under  a  mis- 
take, or  without  authority; 

3.  By  any  other  act  which  will  discharge  a  simple  con- 

tract for  the  payment  of  money ; 

4.  When  the  principal  debtor  becomes  the  holder  of 
the  instrument  at  or  after  maturity  in  his  own  right. 

This  section  deals  with  discharge  of  instrument  and  hence  of 
the  discharge  of  all  parties.^  Under  the  familiar  maxim  that  the 
express  mention  of  one  thing  implies  the  exclusion  of  another, 
the  five  methods  of  discharge  herein  specified  are  deemed  ex- 
clusive,2 

A  negotiable  instrument  is  discharged  by  payment  in  due  course 
by  or  on  behalf  of  the  principal  debtor,^  or  by  the  party  accommo- 
dated, where  the  instrument  is  made  or  accepted  for  accommo- 

1  Wolstenholme  v.  Smith,  34  Utah,  300,  97  Pac.  329. 

2Vanderford  v.  Farmers'  &  Mechanics'  Nat.  Bank,  105  Md.  164,  66  Atl. 
47,  10  L.  R.  A.  (N.  S.)   129. 

3Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  M'o.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Old.,  Or.,  Pa., 
Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  119);  Ariz.  (§  3422);  111. 
(§  118);  Kan.  (§  126);  Md.  (§  138);  Mich.  (§  121);  Neb.  (§  118);  N.  Y. 
(§  200);  Ohio  (§  317SJ);  R.  L  (§  127);  Wis.  (§  1679). 

American  Bank  v.  Jenness,  43  Mass.  (2  Mete.)  288.  See,  also,  Chris- 
man's  Adm'x  V.  Harman,  29  Grat.  (Va.)  494,  26  Am.  Rep.  387.  Payment 
by  indorser  not  on  behalf  of  principal  debtor  does  not  discharge.  Twelfth 
Ward  Bank  v.  Brooks,  63  App.  Div.  220,  71  N.  Y.  Supp.  388. 


§  249  PAYMENT.  321 

dation.*  An  aeeoptnr  is  a  principal  debtor  witliin  the  above  rule, 
and  a  payment  by  him  extinguishes  the  debt.^  But  where  bills 
are  drawn  vii  letters  of  credit,  instead  of  actual  funds  in  the  hands 
of  the  acceptor,  the  drawer  is  the  principal  debtor,  and  is  liable 
to  the  acceptor  for  his  advances.'^  If  the  acceptor,  after  the  bill 
has  been  paid,  again  puts  it  in  circulation,  and  is  sued  thereon, 
he  cannot  set  up  the  payment.'^  Though  payment  by  an  accommo- 
dation acceptor  discharges  the  instrument,  it  is  still  evidence  in 
his  hands  to  charge  the  real  debtor.^  Payment  by  or  on  behalf 
of  the  maker  will  also  discharge  the  instrument,^  and  a  payment 
by  one  of  two  joint  makers  satifies  the  debt,^°  though  the  instru- 
ment was  formally  assigned  to  the  payor.^^ 

Payment  to  holder. 

Payment  in  due  course  to  the  holder  of  a  negotiable  instrument 
operates  as  a  discharge  of  the  instrument.^^     Payment  is  made  in 

^^Subdivision  2,  same  sections  of  negotiable  instruments  laws  as  last 
above  cited. 

Borland  v.  Phillips,  3  Ala.  719,  where  a  payment  by  an  accommoda- 
tion indorser  was  held  not  to  be  a  purchase,  but  to  be  an  extinguishment 
of  the  note.     See,  also,  Roland  v.  Smith,  49  Conn.  404. 

SBrunswick  Bank  v.  Sewall,  34  Me.  202;  Saluan  v.  Relf,  4  La.  Ann. 
575;  Whitwell  v.  Brigham,  36  Mass.  (19  Pick.)  117. 

^Turner  v.  Browder,  68  Ky.   (5  Bush  )   216. 

7Hinton  v.  Bank  of  Columbus,  9  Port.   (Ala.)  463. 

spirst  Nat.  Bank  v.  Maxfield,  83  Me.  576,  22  Atl.  479. 

9American  Bank  v.  Jcnness,  43  Mass.  (2  Mete.)  288;  Chrisman's  Adm'x 
V.  Harman,  29  Grat.   (Va.)  494,  26  Am.  Rep.  387. 

lOGillett  V.  Sweat,  6  111.  475;  Hopkins  v.  Farwell,  32  N.  H.  425;  Stevens 
V.  Hannan,  88  Mich.  13,  49  N.  W.  874,  afg.  86  Mich.  305,  48  N.  W.  951, 
24  Am.   St.   Rep.   125. 

iiSwem  V.  Newell,  19  Colo.  397,  35  Pac.  734;  Gordon  v.  Wansey,  21 
Cal.  77;  Kneeland  v.  Miles  (Tex.  Civ.  App.)  24  S.  W.  1113;  Stevens  v. 
Hannan,  88  Mich.  13,  49  N.  W.  874,  afg.  86  Mich.  305,  48  N.  W.  951,  24 
Am.    St.    Rep.    125. 

i2Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or.,  Pa.. 
Tenn.,    Utah,    Va.,    Wash.,    W.    Va.,    Wyo.    (§  51);    Ariz.    (§  3354);    111. 

Opp.— Sel.— 21 


322  PAYMENT  AND  DISCHARGE.  §249 

due  course  when  it  is  made  at  or  after  maturity  to  the  holder,  in 
good  faith,  and,  without  notice  that  his  title  is  defective.^^ 

The  negotiability  being  established,  there  results  the  rule  that 
the  debtor's  duty  is  to  pay  to  the  person  who  owns  the  note  at 
the  time  of  payment,  or  to  an  agent  of  such  owner  actually 
authorized  to  receive  payment,  and  that  no  payment  to  any  other 
person  can  be  of  any  effect  unless  made  in  actual  reliance  upon 
the  actual  possession  of  the  note,  or  upon  words  or  acts  of  the 
owner  so  unambiguously  declaring  the  authority  of  such  other 
person  to  receive  such  particular  payment  as  to  estop  the  owner 
from  denying  such  authority.^*  This  rule  applies  generally  to 
all  negotiable  paper,  independently  of  the  existence  of  any  mort- 
gage or  other  security .^^    Possession  of  the  instrument  is  ordinarily 

(§  51);  Kan.  (§  58);  Md.  (§  70);  Mich.  (§  53);  Neb.  (§  51);  N.  Y. 
(§  90);  Ohio  (§  3172w);  R.  I.  (§  59);  Wis.  (§  1676-21). 

Ellsworth  V.  Fogg,  35  Vt.  355;  Greve  v.  Schweitzer,  36  Wis.  554. 

i3Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or.,  Pa., 
Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  88);  Ariz.  (§  3391);  111.  (§  87); 
Kan.  (§  95);  Md.  (§  107);  Mich.  (§  90);  Neb.  (§  87);  N.  Y.  (§  148); 
Ohio  (§  31740;  R-  I-  (§  96);  Wis.  (§  1678-18). 

On  the  maturity  of  a  note,  the  maker  has  an  absolute  right  to  pay 
and  thus  relieve  himself  from  the  payment  of  further  interest;  and  if, 
without  further  agreement,  he  neglects  to  pay  it  when  due,  he  still  has 
the  right  to  pay  it  at  any  subsequent  time.  Lahn  v.  Koep,  139  Iowa,  349, 
lis   N.   W.  877. 

i^The  maker  of  a  negotiable  promissory  note  can  satisfy  it  only  by 
payment  to  the  owner  at  the  time,  or  to  such  owner's  duly  authorized 
agent.  If  the  recipient  of  money  is  not  actually  authorized,  the  payment 
is  ineffectual,  unless  induced  by  unambiguous  direction  from  the  owner 
or  justified  by  actual  possession  of  the  note.  Marling  v.  Nommensen, 
127  Wis.  363,  106  N.  W.  844,  115  Am.  St.  Rep.  1017,  5  L.  R.  A.  (N.  S.)  412. 
The  owner,  by  clothing  another  with  the  indicia  of  ownership  and  osten- 
sible authority  to  contract  with  the  maker  of  the  note  for  the  discharge 
thereof,  may  become  estopped  to  deny  the  authority  of  such  person  to 
act  in  the  premises.  Home  Savings  Bank  v.  Stewart,  78  Neb.  624,  110 
N.  W.  947. 

iSMarling  v.  Nommensen,  127  Wis.  363,  106  N.  W.  844,  115  Am.  St. 
Rep.  1017,  5  L.  R.  A.  (N.  S.)  412. 


§  249  CANCELLATION.  323 

prima  facie  evidence  of  the  right  to  receive  paj-ment,'"'  and  is 
generally  regarded  the  sole  adequate  evidence  of  apparent  author- 
ity to  collect  upon  which  the  debtor  has  any  right  to  rely,  or  can, 
without  negligence,  do  so.  Commercial  paper  has  always  been 
favored  in  the  law,  not  less  for  the  ultimate  benefit  of  the  giver 
than  of  the  holder,  and  the  rule  just  referred  to  is  in  line  with  that 
policy.  It  is  so  simple,  and,  once  understood,  furnishes  so  easy 
and  sure  a  means  for  both  debtor  and  owner  to  protect  themselves 
against  unauthorized  acts  of  others  that  it  ought  not  to  be  weak- 
ened or  confused.  The  holder  can  always  be  safe  by  retaining 
the  instrument  in  his  possession ;  the  debtor,  by  refusing  payment 
without  actual  presentation.  It  is  justified  in  application  to  ne- 
gotiable paper  as  distinguished  from  other  property  by  the  very 
dominant  purpose  of  easy  and  probable  transfer  at  any  moment, 
so  that  what  may  be  true  as  to  ownership  of  such  paper  at  one 
moment  is  likely  to  have  changed  by  another.  Of  the  probabil- 
ity of  such  change,  the  negotiability  of  the  instrument  is  a  con- 
tinual warning.^'^  But  possession  by  one  person  does  not  author- 
ize payment  to  him  if  there  is  a  formal  assignment  to  another  on 
the  back  of  the  note.^^  A  payment  to  the  original  payee  after 
the  instrument  has  been  properly  indorsed  or  transferred  will 
not  extinguish  it,^^  unless  the  payment  is  shown  to  have  been 
made  by  the  authority  or  with  the  consent  of  the  holder,  or  to  have 
been  subsequently  accepted  or  ratified  by  him.^o 

By  cancellation  of  instrument — Intent. 

A  negotiable  instrument  is  discharged  by  the  intentional  can- 

isPaulman  v.  Claycomb,  75  Ind.  64;  Cothran  v.  Collins,  29  How.  Pr. 
(N.  Y.)  113. 

i7Loizeaux  v.  Fremder,  123  Wis.  193,  101  N.  W.  423. 

ispier  V.  Bullis,  48  Wis.  429,  4  N.  W.  381.  A  stranger  who  pays  a  note 
at  maturity  to  the  holder  is  presumed  to  have  paid  it,  and  not  to  have 
purchased  it.     Lee  v.  Field,  9  N.  M.  435,  54  Pac.  873. 

i9Wilkinson  v.  Sargent,  9  Iowa,  521;  Harpending  v.  Gray,  Id  Hun,  351, 
27  N.  Y.  Supp.  762;  Perry  v.  Bray,  68  Ga.  293. 

20City  Bank  v.  Taylor,  60  Iowa,  66,  14  N.  W.  128;  Enright  v.  Bcau- 
mond,  68  Vt.  249,  35  Atl.  57. 


324  PAYMENT  AND   DISCHARGE.  §249 

cellation  thereof  by  the  holder  ;2i  jj^t  a  cancellation  made  unin- 
tentionally, or  by  mistake,  or  without  authority  of  the  holder,  is 
inoperative.^^  Where  an  instrument  or  any  signature  thereon 
appears  to  have  been  canceled,  the  burden  of  proof  rests  on  the 
party  who  alleges  that  the  cancellation  was  made  unintentionally, 
or  by  mistake,  or  without  authority .^^ 

Application  of  rules  governing  contracts. 

In  addition  to  the  above  modes  of  discharging  negotiable  in- 
struments, it  is  a  general  rule  that  they  are  discharged  by  any 
act  which  will  discharge  any  simple  contract  for  the  payment  of 
money .2*  But  an  agreement  binding  on  the  holder  to  extend 
the  time  of  payment  does  not  discharge  the  instrument  nor  parties 
primarily  liable.^s  , 

Where  principal  debtor  becomes  holder. 

A  negotiable  instrument  is  discharged  when  the  principal  debt- 
or becomes  the  holder  thereof,  at  or  after  maturity  in  his  own 
right.^^    The  words  in  his  own  right  merely  exclude  the  case  of 

2iNeg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Aliass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or.,  Pa., 
Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  119);  Ariz.  (§  3422);  111. 
(§  118);  Kan.  (§  126);  Md.  (§  138);  Mich.  (§  121);  Neb.  (§  118);  N.  Y. 
(§  200);  Ohio  (§  3175j);  R.  L  (§  127);  Wis.  (§  1679). 

Larkin  v.  Hardinbrook,  90  N.  Y.  333,  43  Am.  Rep.  176  and  cases  cited. 

22Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mfass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or.,  Pa., 
Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  123);  Ariz.  (§  3426);  111. 
(§  122);  Kan.  (§  130);  Md.  (§  142);  Mich.  (§  125);  Neb.  (§  122);  N.  Y. 
(§  204);  Ohio   (§  317Sn);  R.  I.   (§  131);  Wis.   (§  1679-4). 

23Same  sections  of  negotiable  instruments  laws  as  last  above  cited. 

24Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or.,  Pa., 
Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  119);  Ariz.  (§  3422);  111. 
(§  118);  Kan.  (§  126);  Md.  (§  138);  Mich.  (§  121);  Neb.  (§  118);  N.  Y. 
(§  200);   Ohio   (§  317SJ);   R.   I.   (§  127);   Wis.   (§  1679). 

25Accommodation  maker.  Wolstenholme  v.  Smith,  34  Utah,  300,  97 
Pac.  329. 

26Neg.   Inst.   Laws   Colo.,   Conn.,   D.    C,   Fla.,   Idaho,   Iowa,   Ky.,   La., 


§250  PAPER   PAYABLE   AT   BANK.  325 

the  maker  acquiring  the  note  in  a  purelj^  representative  onpnc- 
ity.^"  Under  this  rule  an  assignment  of  the  instrument  to  one  joint 
maker  extinguishes  it,-^  and  so  does  an  indorsement  to  the  ac- 
ceptor or  maker  ;2s^  but  a  purchase  by  the  maker  as  agent  for  a 
third  person  does  not  ordinarily  extinguish  the  instrument.^'' 
Where  the  holder  surrenders  the  note  to  the  maker  on  part  pay- 
ment and  promise  to  pay  the  balance,  he  cannot  subsequeully 
maintain  an  action  against  the  maker  on  the  note  to  recover  the 
balance  thereof.^^ 


Instruments  Payable   At  Bank. 

§  250.  Where  the  instrument  is  made  payable  at  a  bank,  it  is 
equivalent  to  an  order  to  the  bank  to  pay  the  same  for 
the  account  of  the  principal  debtor  thereon. 

Where  the  instrument  is  made  payable  at  a  bank,  it  is  equivalent 
to  an  order  to  the  bank  to  pay  the  same  for  the  account  of  the 
principal  debtor  thereon.^^  Where  the  instrument  is  made  pay- 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or.,  Pa., 
Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§119);  Ariz.  (§  3422);  111. 
(§  118);  Kan.  (§  126);  Md.  (§  138);  Mich.  (§  121);  Neb.  (§  118);  N.  Y. 
(§  200);  Ohio  (§  3175J);  R.  I.   (§  127);  Wis.   (§  1679). 

27Schwartzman  v.  Post,  94  App.  Div.  474,  84  N.  Y.  Supp.  922,  87  N.  Y. 
Supp.  872. 

28See  Stevens  v.  Hannan,  88  Mich.  13,  49  N.  W.  874;  Kneeland  v. 
Miles  (Tex.  Civ.  App.)  24  S.  W.  1113. 

29Beede  v.  Real  Estate  Bank,  Pike  (Ark.)  546;  Long  v.  Bank  of  Cyn- 
thiana.  11  Ky.  (1  Litt.)  290,  13  Am.  Dec.  234. 

30Bowman  v.  St.  Louis  Times,  87  Mo.  191;  Dubois  v.  Stoncr,  11  III. 
App.  403.  But  contra,  see  Cason  v.  Heath,  86  Ga.  438,  12  S.  E.  678; 
White  V.  Fisher,  62  111.  258;  Eastman  v.  Plumer,  32  N.  H.  238. 

3iSchwartzman  v.  Post,  94  App.  Div.  474,  84  N.  Y.  Supp.  922,  87  N.  Y. 
Supp.   872. 

32Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  low^a,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or.,  Pa., 
Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  87);  Ariz.  (§  3390);  Kan. 
(§  94);  Md.  (§  106);  Mich.  (§  89);  N.  Y.  (§  147);  Ohio  (§  3174e);  R.  I. 
(§  95);  Wis.  (§  1678-17). 


326  PAYMENT  AND  DISCHARGE.  §251 

able  at  a  bank,  and  is  left  there  for  collection,  the  bank  is  en- 
titled to  receive  payment  as  agent  of  the  payee  or  holder ;  ^^  but 
if  the  instrument,  though  payable  at  a  bank,  is  not  left  there  for 
collection,  payment  to  the  bank  does  not  satisfy  it,  because  the 
bank,  in  receiving  the  money  in  such  case,  acts  only  as  agent  of 
the  maker  or  payor.^* 

What  Constitutes  Payment. 

§  251.    In  the  absence  of  an  agreement  to  the  contrary,  pay- 
ment must  be  made  in  money. 

Since  the  contract  in  a  negotiable  instrument  is  to  pay  money, 
it  is  not  performed — that  is,  the  instrument  is  not  paid — by  turn- 
ing over  to  the  creditor  anything  but  money,  unless  there  was  an 
agreement  to  accept  other  property  in  payment.^^ 

Accounts  and  credits  in  favor  of  the  debtor  do  not  constitute 
payment  unless  there   was   an  agreement  to  that  effect ;  ^^  but 

Bedford  Bank  v.  Acoam,  125  Ind.  584,  25  N.  E.  713,  21  Am.  St.  Rep. 
258,  9  L.  R.  A.  560,  where  the  court  held  that  the  law  would  imply  author- 
ity from  the  depositor  by  reason  of  his  making  the  instrument  negotiable 
and  payable  at  the  bank.  A  "bank,"  within  the  meaning  of  the  negotiable 
instruments  laws,  includes  "  any  person  or  association  of  persons  carry- 
ing on  the  business  of  banking,  whether  incorporated  or  not."  Neg. 
Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La.,  Mass.,  Mo., 
Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or.,  Pa.,  Tenn., 
Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  191);  Ariz.  (§  3487);  111.  (§  190);  Kan. 
(§  2);  Md.  (§  14);  Mich.  (§  2);  Neb.  (§  189);  N.  Y.  (§  2);  Ohio  ^§  3178); 
R.  I.  (§  2);  Wis.   (§  1675). 

33Smith  V.  Essex  County  Bank,  22  Barb.  (N.  Y.)  627;  Ward  v.  Smith, 
74  U.  S.  (7  Wall.)  447,  19  Law.  Ed.  207;  Lazier  v.  Horan,  55  Iowa,  75, 
7  N.  W.  457,  39  Am.  Rep.  167.  But  see  Sutherland  v.  First  Nat.  Bank, 
31  Mich.  230. 

34St.  Paul  Nat.  Bank  v.  Cannon,  46  Minn.  95,  48  N.  W.  526,  24  Am.  St. 
Rep.  189;  First  Nat.  Bank  v.  Chilson,  45  Neb.  257,  63  N.  W.  362;  Hill  v. 
Place,  36  How.  Pr.  26,  5  Abb.  Pr.  (N.  Y.)   18. 

35Graydon  v.  Patterson,  13  Iowa,  256,  81  Am.  Dec.  432;  Heath  v.  Silver- 
thorn  Lead  M.  &  S.  Co.,  39  Wis.  146. 

sC'Rugland  v.  Thomson,  48  Minn.  539,  51  N.  W.  604;  Bettison  v.  Jen- 
nings, 6  Eng.  116. 


§  251  PAYMENT.  327 

where,  by  agreement  of  the  persons,  any  balance  found  due  on 
a  settlement  between  tAvo  of  them  is  to  be  credited  on  a  noto 
executed  by  them  to  the  third,  such  balance,  when  found,  oper- 
ates as  a  payment.^^  The  mere  acceptance  of  collateral  security 
does  not  operate  as  a  payment ;  ^s  but  a  payment  and  satisfaction 
of  the  security  operates  as  a  payment  of  the  instrument  secured.^' 
So,  also,  an  agreement  to  rely  on  the  security  may  amount  to  a 
paj^ment,  as  where  a  bank  at  which  a  note  secured  by  chattel 
mortgage  was  payable  agreed  that  it  would  look  to  the  mort- 
gaged property  alone,  it  released  the  maker,  if  at  the  date  of  the 
agreement  such  property  was  sufficient  to  pay  the  note,  though 
it  had  depreciated  in  value  at  the  time  the  mortgage  was  fore- 
closed.*^  Other  notes,  whether  renewals  or  not,  do  not  operate 
as  payment  unless  it  is  so  agreed,*^  and  the  same  rule  applies  to 
checks  or  drafts  taken  by  the  payee  or  holder.*^  The  intention- 
of  the  parties  governs  in  this  class  of  cases,  and,  if  the  new  instru- 
ment was  intended  as  payment,  it  will  so  operate,  though  the  old 

37Vawter  v.  Griffin,  40  Ind.  593. 

38Hook  V.  White,  36  Cal.  299;  Mohawk  Bank  v.  Van  Home,  7  Wend. 
(N.  Y.)  117;  Averill  v.  Loucks,  6  Barb.  (N.  Y.)  470;  Sterling  v.  Marietta 
&  S.  Trading  Co.,  11  Serg.  &  R.  (Pa.)   179. 

39Gilliam  v.  Davis,  7  Wash.  332,  35  Pac.  39;  Sampson  v.  Fox,  109  Ala. 
662,  19  So.  896,  55  Am.  St.  Rep.  950;  Bodley  v.  Anderson,  2  111.  App.  450; 
Kent  V.  May,  13  Mich.  38. 

40First  Nat.  Bank  v.  Watkins,  154  Mass.  385,  28  N.  E.  275. 

"Chisholm  V.  Williams,  128  111.  115,  21  N.  E.  215;  Moses  v.  Trice,  21 
Grat.  (Va.)  556,  8  Am.  Rep.  609;  Boston  Nat.  Bank  v.  Jose,  10  Wash. 
185,  38  Pac.  1026;  Holland  Trust  Co.  v.  Waddell,  75  Hun,  104,  26  N.  Y. 
Supp.  980;  Hadden  v.  Dooley,  92  Fed.  274;  Savings  Bank  of  San  Diego 
County  V.  Central  Market  Co.,  122  Cal.  28,  54  Pac.  273;  First  Nat.  Bank 
V,  Gridley,  112  App.  Div.  398,  98  N.  Y.  Supp.  445.  Acceptance  of  a  forged 
renewal  note  does  not  constitute  a  payment  of  the  first  note.  Central 
Nat.  Bank  v.  Copp,  184  Mass.  328,  68  N.  E.  334. 

42Burkhalter  v.  Second  Nat.  Bank,  42  N.  Y.  538,  40  How.  Pr.  (N.  Y.) 
324;  Western  .Brass  Mfg.  Co.  v.  Maverick,  4  Tex.  Civ.  App.  535,  23  S.  W. 
728;  Hamill  v.  German  Nat.  Bank,  13  Colo.  203,  22  Pac.  438.  A  bank  re- 
ceiving a  draft  for  collection  must  collect  it  in  money,  and,  if  it  takes  a 
check  of  the  debtor  instead,  it  does  so  at  its  peril.  National  Bank  of  Com- 
merce v.  American  Exchange  Bank,  151  Mo.  320,  52  S.  W.  265,  14  Am. 
St.  Rep.  527. 


328  PAYMENT  AND  DISCHARGE.  §  252 

instrument  was  not  surrendered ,**3  1,1^1  -^yin  not  so  operate  if  it 
is  worthless  or  invalid.^*  While  ordinarily  a  check  given  in  sat- 
isfaction of  a  debt  is  merely  deemed  a  provisional  payment,  still 
such  payment  becomes  absolute  when  the  creditor,  or  his  agent, 
indorses  the  creditor's  name  on  the  check  and  negotiates  it.*^ 
Merely  placing  the  consideration  to  the  credit  of  the  seller  upon 
the  books  of  the  purchaser  does  not  constitute  payment.*^ 

Instruments  Drawn  in  Sets. 

§  252.    Where  any  one  part  of  a  bill  drawn  in  a  set  is  discharged 
by  payment  or  otherwise,  the  whole  bill  is  discharged. 

Exception. — When  the  acceptor  of  a  bill  drawn  in  a 
set  pays  it  without  requiring  the  part  bearing  his  ac- 
cept-^nce  to  be  delivered  up  to  him,  and  that  part  at 
maturity  is  outstanding  in  the  hands  of  a  holder  m  due 
course,  he  is  liable  to  the  holder  thereon. 

It  is  a  general  rule  that  payment  of  any  one  part  of  a  set  oper- 
ates as  a  payment  and  discharge  of  the  whole  set.*^     The  aceptor 

43Woodbridge  v.  Skinner,  15  Conn.  306;  French  v.  French,  84  Iowa, 
655,  51  N.  W.  145,  15  L.  R.  A.  300;  First  Nat.  Bank  v.  Getz,  96  Iowa,  139, 
64  N.  W.  799.  The  rule  seems  to  be  different  in  New  York.  See  East 
River  Bank  v.  Butterworth,  45  Barb.  (N.  Y.)  476;  Schmidt  v.  Livingston, 
16  Misc.  554,  38  N.  Y.  Supp.  746. 

44Lovinger  v.  First  Nat.  Bank,  81  Ind.  354;  Ramsdell  v.  Soule,  29  Mass. 
(12  Pick.)  126;  Hughes  v.  Wheeler,  8  Cow.  (N.  Y.)  77.  The  surrender  of 
a  genuine  note  in  exchange  for  an  instrument  purporting  to  be  a  renewal 
note  but  which  is  in  fact  a  forgery  does  not  extinguish  the  surrender 
note,  which,  although  not  to  be  found,  still  can  be  sued  upon  by  the 
holder  thus  forced  to  give  it  up.  Bass  v.  Wellesley,  192  Mass.  526,  76 
N.  E.  543. 

45Kramer  v.  Grant,  60  Misc.  109,  111  N.  Y.  Supp.  709. 

46See  Hodge  v.  Smith,  130  Wis.  326,  110  N.  W.   192. 

47Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or.,  Pa., 
Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  183);  Ariz.  (§  3486);  111. 
(§  182);  Kan.  (§  190);  Md.  (§  202);  Mich.  (§  185);  Neb.  (§  182);  N.  Y. 
(§  315);  Ohio  (§  3177t);  R.  I.  (§  191);  Wis.  (§  1681-40). 


§255  PAYMENT  FOR  HONOR.  329 

of  a  bill  drawn  in  a  set  should,  on  payment  of  the  part  bearing 
his  acceptanee,  require  such  part  to  be  surrendered  to  him.  If 
he  pays  without  requiring  such  surrender,  he  is  liable,  notwith- 
standing the  payment,  to  a  holder  in  due  course.^^ 


Payment  op  Bills  of  Exchange  for  Honor. 

§  253.  Where  a  bill  has  been  protested  for  nonpayment,  any  per- 
son may  intervene  and  pay  it  supra  protest  for  the  honor 
of  any  person  liable  thereon  or  for  the  honor  of  the  per- 
son for  whose  account  it  was  drawn. 

§  254.  The  payment  for  honor  supra  protest  in  order  to  operate 
as  such  and  not  as  a  mere  voluntary  payment  must  be 
attested  by  a  notarial  act  of  honor  which  may  be  append- 
ed to  the  protest  or  form  an  extension  to  it. 

§  255.  The  notarial  act  of  honor  must  be  founded  on  a  declara- 
tion made  by  the  payor  for  honor,  or  by  his  agent  in  that 
behalf,  declaring  his  intention  to  pay  the  bill  for  honor 
and  for  whose  honor  he  pays. 

Durkin  v.  Cranston,  7  Johns.  (N.  Y.)  442;  Ingraham  v.  Gibbs,  2  Dall. 
(Pa.)  134;  Downes  v.  Church,  38  U.  S.  (13  Pet.)  205,  10  Law.  Ed.  124. 

*8Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or.,  Pa., 
Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  182);  Ariz.  (§  3485);  111. 
(§  181);  Kan.  (§  189);  Md.  (§  201);  Mich.  (§  184);  Neb.  (§  181);  N.  Y. 
(§  314);  Ohio  (§  3177s);  R.  I.  (§  190);  Wis.  (§  1681-39). 

See  Holden  v.  Davis,  57  Miss.  769.  In  this  case  two  bills,  while  for 
the  same  amount,  were  not  intended  as  duplicates  of  each  other,  but 
together  represented  the  whole  amount  intended  to  be  paid.  One  was 
accepted,  the  other  was  not,  but  the  acceptor  paid  the  unaccepted  bill 
by  mistake,  and  was  sued  on  the  accepted  bill.  Held  that  the  payment 
of  the  unaccepted  bill  was  neither  a  defense  nor  a  good  set-off.  When 
the  instrument  is  paid  it  must  be  delivered  up  to  the  person  paying  it. 
Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or.,  Pa., 
Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  74);  Ariz.  (§  3377);  111. 
(§  741;  Kan.  (§  81);  Md.  (§  93);  Mich.  (§  76);  Neb.  (§  74);  N.  Y. 
(§  134);  Ohio  (§  3173s);  R.  I.  (§  82);  Wis.   (§  1678-4). 


330  PAYMENT  AND   DISCHARGE.  §256 

§  256.  Where  two  or  more  persons  offer  to  pay  a  bill  for  the 
honor  of  different  parties,  the  person  whose  payment 
will  discharge  most  parties  to  the  bill  is  to  be  given  the 
preference. 

§  257.  Where  a  bill  has  been  paid  for  honor,  all  parties  subse- 
quent to  the  party  for  whose  honor  it  is  paid  are  dis- 
charged, but  the  payer  for  honor  is  subrogated  for,  and 
succeeds  to,  both  the  rights  and  duties  of  the  holder  as 
regards  the  party  for  whose  honor  he  pays  and  all  parties 
liable  to  the  latter. 

§  258.  Where  the  holder  of  a  bill  refuses  to  receive  payment 
supra  protest,  he  loses  his  right  of  recourse  against  any 
party  who  would  have  been  discharged  by  such  payment. 

§  259.  The  payer  for  honor,  on  paying  to  the  holder  the  amount 
of  the  bill  and  the  notarial  expenses  incidental  to  its 
dishonor,  is  entitled  to  receive  both  the  bill  itself  and 
the  protest. 

Payment  of  bills  of  exchange  for  honor — Who  may  make. 

A  bill  being  protested  for  nonpayment,  any  person  may  inter- 
vene and  pay  it  supra  protest  for  the  honor  of  any  person  liable 
thereon,  or  for  the  honor  of  the  person  for  whose  account  it  was 
drawn.*^ 

Same — Attestation. 

In  order  to  be  effective  as  such  and  not  merely  to  operate  as  a 
voluntary  payment,  a  payment  for  honor  supra  protest  must  be 

*9Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or.,  Pa., 
Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  171);  Ariz.  (§  3474);  111. 
(§  170);  Kan.  (§  178);  Md.  (§  190);  Mich.  (§  173);  Neb.  (§  170);  N.  Y. 
(§  300);  Ohio(§  3177h);  R.  I.  (§  179);  Wis.  (§  1681-28). 

Konig  V.  Bayard,  26  U.  S.  (1  Pet.)  250,  7  Law.  Ed.  558.  Payment  for 
honor  cannot  be  made  before  protest.  Baring  v.  Clark,  36  Mass.  (19  Pick.) 
220;  Gazzam  v.  Armstrong,  33  Ky.  (3  Dana)  554. 


§259  PAYMENT  FOR  HONOR.  3;U 

attested  by  a  notarial  act  of  honor,  which  may  be  appended  to 
the  protest,  or  form  an  extension  to  it.^° 

Same — Declaration  before  payment  for  honor. 

It  is  essential  that  the  notarial  act  of  honor  be  founded  on  a 
declaration  made  by  the  payer  for  honor,  or  by  his  agent  in  that 
behalf,  declaring  his  intention  to  pay  the  bill  for  honor,  and  for 
whose  honor  he  pays.^^ 

Same — Preference  of  parties  offering  to  pay  for  honor. 

Two  or  more  persons  offering  to  pay  a  bill  for  the  honor  of 
different  persons,  the  person  whose  payment  will  discharge  most 
parties  to  the  bill  is  to  be  given  the  preference.^^ 

Same — Effect  of  payment  on  subsequent  parties. 

A  bill  having  been  paid  for  honor,  all  parties  subsequent  to  the 
party  for  whose  honor  it  is  paid  are  discharged,  but  the  payer  . 
is  subrogated  for,  and  succeeds  to,  both  the  rights  and  duties  of 
the  holder  as  regards  the  party  for  whose  honor  he  pays,  and  all 
parties  liable  to  the  latter.^^ 

soNeg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or.,  Pa., 
Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  172);  Ariz.  (§  3475);  111. 
(§  171);  Kan.  (§  179);  Md.  (§  191);  Mich.  (§  174);  Neb.  (§  171);  N.  Y. 
(§  301);  Ohio  (§  3177i);  R.  L  (§  180);  Wis.  (§  1681-29). 

See  Gazzam  v.  Armstrong,  33  Ky.   (3  Dana)   554. 

siNeg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or.,  Pa., 
Tenn.,  Utah;  Va.,  Wash.,  W.  Va.,  Wyo.  (§  173);  Ariz.  (§  3476);  111. 
(§  172);  Kan.  (§  180);  Md.  (§  192);  Mich.  (§  175);  Neb.  (§  172);  N.  Y. 
(§  302);  Ohio  (§  3177J);  R.  I.  (§  181);  Wis.  (§  1681-30). 

See  Gazzam  v.  Armstrong,  33  Ky.   (3  Dana)   554. 

52Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or.,  Pa., 
Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  174);  Ariz.  (§  3477);  111 
(§  173);  Kan.  (§  181);  Md.  (§  193);  Mich.  (§  176);  Neb.  (§  173);  N.  Y. 
(§  303);  Ohio  (§  3177k);  R.  I.  (§  182);  Wis.  (§  1681-31). 

ssNeg.    Inst.   Laws    Colo.,   Conn.,   D.    C,   Fla.,   Idaho,   Iowa,   Ky.,   La., 


332  PAYMENT   AND   DISCHARGE.  §260 

Same — Refusal  of  holder  to  receive  payment  for  honor. 

The  holder  refusing  payment  supra  protest,  he  loses  his  right 
of  recourse  against  any  party  who  would  have  been  discharged 
by  such  payment.^* 

Same — Rights  of  payer  for  honor. 

The  payer  for  honor,  on  payment  to  the  holder  of  the  amount  of 
the  bill,  and  the  notarial  expenses  incident  to  its  dishonor,  is  en- 
titled to  receive  both  the  bill  itself  and  the  protest.^^ 


Discharge  of  Parties  Secondarily  Liable. 

§  260.    A  person  secondarily  liable  on  the  instrument  is  dis- 
charged : 

1.  By  any  act  which  discharges  the  instrument; 

2.  By  the  intentional  cancellation  of  his  signature  by  the 

holder; 

Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or.,  Pa., 
Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.'  (§  175);  Ariz.  (§  3478);  111. 
(§  174);  Kan.  (§  182);  Md.  (§  194);  Mich.  (§  177);  Neb.  (§  174);  N.  Y. 
(§  304);  Ohi'o  (§  31771);  R.  I.  (§  183);  Wis.  (§  1681-32). 

See  McDowell  v.  Cook,  14  Miss.  (6  Smedes  &  M.)  420,  45  Am.  Dec. 
289. 

54Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or.,  Pa., 
Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  176);  Ariz.  (§  3479);  111. 
(§  175);  Kan.  (§  183);  Md.  (§  195);  Mich.  (§  178);  Neb.  (§  175);  N.  Y. 
(§  305);  Ohio  (§  3177m);  R.  I.   (§  184);  Wis.   (§  1681-33). 

55Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or.,  Pa., 
Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  177);  Ariz.  (§  3480);  111. 
(§  176);  Kan.  (§  184);  Md.  (§  196);  Mich.  (§  179);  Neb.  (§  176);  N.  Y. 
(§  306);  Ohio  (§  3177n);  R.  I.  (§  185);  Wis.  (§  1681-34). 

As  to  the  right  of  the  payer  for  honor  to  reimbursement,  see  Grosvenor 
V.  Stone,  25  Mass.  (8  Pick.)  79;  Leake  v.  Burgess,  13  La.  Ann.  156.  A 
voluntary  payment  without  request  does  not  give  a  right  to  reimburse- 
ment.    Willis  V.  Hobs'on,  37  Me.  403. 


§260  DISCHARGE   OF  SECONDARY   PARTIES.  333 

3.  By  the  discharge  of  a  prior  party; 

4.  By  a  valid  tender  of  payment  made  by  a  prior  party; 

5.  By  a  release  of  the  principal  debtor  unless  the  holder's 

right  of  recourse  against  the  party  secondarily  liable 
is  expressly  reserved; 

6.  By  an  agreement  binding  upon  the  holder  to  extend 

the  time  of  payment,  or  to  postpone  the  holder's 
right  to  enforce  the  instrument,  unless  made  with 
the  assent  of  the  party  secondarily  liable,  or  unless 
the  right  of  recourse  against  such  party  is  expressly 
reserved ; 

7.  In  soma  states  by  misapplication  of  securities  or  funds 

applicable  to  debt. 

The  methods  of  discharge  stated  are  exclusive.^^  A  person  sec- 
ondarily liable  on  the  instrument  is  discharged  by  any  act  which 
discharges  the  instrument  itself.^^  He  is  also  discharged  by  the  in- 
tentional cancellation  of  his  signature  by  the  holder,^^  by  the  dis- 
charge of  a  prior  party,^^  or  by  a  valid  tender  of  payment  made 

seVanderford  v.  Farmers'  &  Mechanics'  Nat.  Bank,  105  Md.  164,  66 
Atl.  47,  10  L.  R.  A.  (N.  S.)  129. 

57Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,;  N.  M.,  N.  C,  N.  D.,  Okl.,  Or.,  Pa., 
Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  120);  Ariz.  (§  3423);  111. 
(§  119);  Kan.  (§  127);  xMd.  (§  139);  Mich.  (§  122);  Neb.  (§  119);  N.  Y. 
(§  201);  Ohio  (§  3175k);  R.  L   (§  128);  Wis.   (§  1679-1). 

ssSubdivision  2,  same  sections  of  negotiable  instruments  laws  as  last 
above  cited. 

See  ante,  §  249. 

S^Subdivisiion  3,  same  sections  of  negotiable  instruments  laws  as  last 
above  cited. 

Spies  V.  National  City  Bank,  174  N.  Y.  222,  66  N.  E.  736,  61  L.  R.  A. 
193.  Discharge  of  maker  discharges  indorser.  Shutts  v.  Fingar,  100  N.  Y. 
539,  3  N.  E.  588;  Union  Nat.  Bank  v.  Grant,  48  La.  Ann.  18,  18  So.  705. 
Discharge  of  indorser  releases  subsequent  indorser.  State  of  New  York 
Nat.  Bank  v.  Coykendall,  58  Hun  (N.  Y.)  205,  12  N.  Y.  Supp.  334,  S3  Am. 
Rep.  231;  Plankington  v.  Gorman,  93  Wis.  560,  67  N.  W.  1128. 


334  PAYMENT  AND  DISCHARGE.  §260 

by  a  prior  party.^^  A  release  of  the  principal  debtor  discharges  a 
party  secondarily  liable,  unless  the  holder's  right  of  recourse 
against  the  party  secondarily  liable  is  expressly  reserved.^^ 

By  agreement  extending  time  of  payment,  or  postponing  right  to 
enforce  instrument. 

A  party  secondarily  liable  is  also  discharged  by  any  agreement, 
binding  on  the  holder,  to  extend  the  time  of  payment,  or  to  post- 
pone the  holder's  right  to  enforce  the  instrument,  unless  the  right 
of  recourse  against  such  party  is  expressly  reserved.^^  A  pro- 
vision in  a  note  payable  on  or  before  a  date  named,  seeking  to 
evade  this  clause  and  providing  that  the  makers  and  indorsers 
consent  that  the  time  of  payment  may  be  extended  without  notice, 
does  not  render  the  note  non-negotiable.^^  Mere  delay  will  not 
discharge  a  person  secondarily  liable.  There  must  be  a  valid 
agreement  to  extend  the  time  or  vary  the  contract.^*  and  this 
agreement  must  be  supported  by  a  new  consideration.^^  If,  how- 
ever, the  liability  of  a  party  secondarily  liable  has  become  fixed, 
he  will  not  be  discharged  by  a  subsequent  extension  of  time  given 

soSubdivision  4,  same  secti'ons  of  negotiable  instruments  laws  as  last 
above  cited. 

6iSubdivision  5,  same  sections  of  negotiable  instruments  laws  as  last 
above  cited. 

Ziegfried  v.  Stein,  117  N.  Y.  Supp.  900. 

See    Ludwig  v.    Iglehart,   43    Md.   39;    Gloucester    Bank  v.    Worcester, 

27  Mass.  (10  Pick.)  527;  Eldrege  v.  Chacon,  Crabbe,  296. 
62Subdivision  6,  same  sections  of  negotiable  instruments  laws  as   last 

above  cited. 

First  Nat.  Bank  v.  Lineberger,  83  N.  C.  454,  35  Am.  Rep.  582;  Place  v. 
Mcllvan,  1  Daly,  266,  38  N.  Y.  96,  97  Am.  Dec.  m;  Stein  v.  Steindler,  1 
Misc.  414,  20  N.  Y.  Supp.  839;  Commercial  Bank  of  Lexington  v.  Wood, 
56  Mo.  App.  214.  Where  holder  of  note  agreed  with  maker  not  to  press 
the  suit  commenced  thereon  while  certain  monthly  payments  should  con- 
tinue to  be  made,  indorsers  were  held  discharged.     Deahy  v.   Choquet, 

28  R.  I.  338,  67  Atl.  421. 

63First  Nat.  Bank  v.  Buttery  (N.  D.)   116  N.  W.  341. 

64Way  v.  Dunham,  166  Mass.  263,  44  N.  E.  220;  Smith  v.  Erwin,  11 
N.  Y.  466. 

65Friedenberg  v.  Robinson,  14  Fla.  130.  Part  payment  is  not  sufficient 
consideration.     Manchester  v.  Van  Brunt,  2  Misc.  228,  22  N.  Y.  Supp.  362 


§  260  DISCHARGE   OF  SECONDARY   PARTIES.  335 

to  the  maker.*'''  The  negotiable  instruments  law  as  adopted  in 
"Wisconsin  has  additional  provisions,  negativing  a  discharge  by 
such  agreements  if  they  were  made  with  the  assent  of  the  person 
secondarily  liable,  or  if  he  has  been  fully  indemnified.^'^ 

By  misapplication  of  securities  or  funds  applicable  to  debt. 

Another  addition  has  been  made  by  the  Wisconsin  negotiable 
instruments  law  by  the  provision  that  a  person  secondarily  liable 
is  discharged  "by  giving  up  or  applying  to  other  purposes  col- 
lateral securit}^  applicable  to  the  debt,  or,  there  being  in  the 
holder's  hands,  or  within  his  control,  the  means  of  complete  or 
partial  satisfaction,  the  same  are  applied  to  other  purposes."^ 
In  this  class  of  cases,  "the  original  contract  is  not  changed  in 
terms  between  any  of  the  parties,  but  a  collateral  indemnity, 
held  in  trust  by  the  creditor,  and  upon  which  the  surety  has  a 
right  to  rely,  has  been  destroyed,  and  he  is  presumed  to  have 
suffered  loss  by  the  surrender  of  the  security.  The  creditor, 
having  misapplied  the  trust  fund,  and  acted  in  bad  faith  toward 
the  surety,  must  be  held  to  have  released  the  surety  in  equity,  or, 
rather,  to  be  estopped  from  looking  to  him  for  payment,  by  reason 
of  his  bad  faith  in  discharging  his  duty  to  the  trust  fund  held 
for  their  common  security.  "^^ 


66State  Bank  v.  Wilson,  12  N.  C.  (1  Dev.)  484;  Pequet  v.  Dimitry, 
3   La.   385. 

67Negotiable  Inst.  Law,  §   1679-1. 

esNegotiable  Inst.   Law,  §  1679-1,  subd.  4a. 

Haslett  V.  Ehrick,  1  Nott  &  McC.  (S.  C.)  116;  Union  Nat.  Bank  v. 
Cooley,  27  La.  Ann.  202.  In  order  to  discharge  the  indorser,  collateral 
security  released  by  the  holder  must  be  valid  security.  Id.  Equity  will 
not  relieve  an  indorser  who  has  not  used  diligence  to  protect  himself 
against  the  loss  of  security  by  prior  parties.  Mahone  v.  Central  Bank, 
17  Ga.  111.  See,  also.  Brown  v.  Nichols,  123  Ind.  492,  24  N.  E.  339; 
Kirkpatrick  v.  Hawk,  80  111.  122. 

fl»Rogers  v.  School  Trustees,  46  111.  428. 


336  PAYMENT  AND  DISCHARGE.  §  2(>1 

"Who  Primarily  Liable. 

§  261.  The  person  "primarily"  liable  on  an  instrument  is  the 
person  who  by  the  terms  of  the  instrument  is  absolutely 
required  to  pay  same.  All  other  parties  are  "second- 
arily" liable. 

Under  the  terms  of  the  act,  all  who  are  absolutely  required  to 
pay  the  instrument  are  primarily  liable  thereon ;'^°  this  includes 
an  accommodation  maker''^  and  a  surety .'^^ 

Renunciation. 

§  262.  The  holder  may  expressly  renounce  his  rights  against 
any  party  to  the  instrument  before,  at,  or  after  its 
maturity.  An  absolute  and  unconditional  renunciation 
of  his  rights  against  the  principal  debtor  made  at  or 
after  the  maturity  of  the  instrument  discharges  the 
instrument.  But  a  renunciation  does  not  affect  the 
rights  of  a  holder  in  due  course  without  notice.    A  re- 

70Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or.,  Pa., 
Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  192);  Ariz.  (§  3488);  111. 
(§  191);  Kan.  (§  3);  Md.  (§  IS);  Mich.  (§  2);  Neb.  (§  190);  N.  Y. 
(§  3);  Ohio  (§  3178a);  R.  L  (§  3);  Wis.  (§  1675). 

^iVanderford  v.  Farmers'  &  Mechanics'  Nat.  Bank,  115  Md.  164,  66 
Atl.  47,  10  L.  R.  A.  (N.  S.)  129;  National  Citizens'  Bank  v.  Toplitz,  81 
App.  Div.  593,  81  N.  Y.  Supp.  422;  Cellers  v.  Meachem,  49  Or.  186,  89 
Pac.  426.  In  this  case  the  court  bases  its  decision  in  the  following  rea- 
soning: Since  the  act  makes  an  accommodation  maker  primarily  liable, 
and  "in  one  section  designates  how  negotiable  instruments  may  be  dis- 
charged, but  contains  no  provision  whereby  a  person  primarily  liable  can 
be  released,  except  by  payment,  etc.,  and  in  the  section  following  speci- 
fies the  manner  in  which  persons  secondarily  liable  may  be  relieved  of 
responsibility  on  such  instrument,  it  follows  that  the  immunities  indicated 
were  intended  to  exclude  all  exceptions  not  contained  therein  under  the 
familiar  maxim  'Expressio  unius  est  exclusio  alterius.' "  Cellers  v. 
.Meachem,  49  Or.  186,  89  Pac.  426. 

72Rouse  V.  WootQn,  140  N.  C.  557,  53  S.  E.  430,  111  Am.  St.  Rep.  875. 


|2i62  RENUNCIATION.  337 

nunciation  must  be  in  writing,  unless  the  instrument  is 
delivered  up  to  the  person  primarily  liable  thereon. 

The  holder  may  expressly  renounce  his  rights  against  any  party 
to  the  instrument  before,  at,  or  after  its  maturity .'^  An  absolute 
and  unconditional  renunciation  of  his  right  against  the  principal 
debtor,  made  at  or  after  the  maturity  of  the  instrument,  dis- 
charges it,  but  a  renunciation  does  not  affect  the  rights  of  a  holder 
in  due  course  without  notice.*^*  The  first  relates  to  the  party ;  the 
second  to  the  instrument,'^^  and  the  two  are  perfectly  consistent."^ 
A  renunciation  must  be  in  writing,  unless  the  instrument  is  deliv- 
ered up  to  the  person  primarily  liable  thereon.'^^  The  correspond- 
ing provision  of  the  English  Bills  of  Exchange  Act  1882  is  to  the 
same  effect.  It  has  been  held  under  this  subdivision  that  a  parol 
renunciation  by  the  holder  of  all  rights  under  a  promissory  note 
is  inoperative  unless  the  note  is  delivered  up  to  the  "maker"  or 
"acceptor,"  and  that  a  devisee  of  the  maker  is  not  within  the 
terra  "maker,"  though  an  executor  or  administrator  of  the  maker 
might  be  included  in  the  term.'^^ 

'SNeg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or.,.Pa., 
Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  122);  Ariz.  (§  3425);  111. 
(§  121);  Kan.  (§  129);  Md.  (§  141);  Mich.  (§  124);  Neb.  (§  121);  N.  Y. 
(§  203);  Ohio  (§  3175-m);  R.  I.  (§  130);  Wis.  (§  1679-3). 

74Same  sections  of  negotiable  instruments  laws  as  last  above  cited. 

75Leask  v.  Dew,  102  App.  Div.  529,  92  N.  Y.  Supp.  891. 

76Remarks  to  contrary,  in  Leask  v.  Dew,  102  App.  Div.  529,  92  N.  Y. 
Supp.  891,  are  believed  erroneous. 

77Same  sections  of  negotiable  instruments  laws  as  last  above  cited. 

Baldwin  v.  Daly,  41  Wash.  416,  83  Pac.  724.  Paper,  found  after  payee's 
death,  stating  he  wished  note  canceled,  or  if  that  was  illegal  his  heirs 
should  be  notified  of  his  orders,  held  not  a  renunciation.  Leask  v.  Dew, 
102  App.  Div.  529,  92  N.  Y.  Supp.  891.  Three  hours  before  a  payee's 
death  the  nurse  in  attendance  upon  him  wrote  the  following  note  at  his 
dictation:  "30th  August,  1889.  It  is  by  Mr.  George's  dying  wish  that  the 
cheque  (sic)  for  £2,000  money  lent  to  Mrs.  Francis  be  destroyed  as 
soon  as  found."  Held  not  a  sufficient  renunciation  to  discharge  the 
note.     In  re  George,  44  Ch.  Div.  627. 

78  45  &  46  Vict.  c.  61,  §  62,  subd.  1.  Edwards  v.  Walters  [1896]  2 
Ch.  157. 

Opp.— Sel.^  22 


338  PAYMENT  AND   DISCHARGE.  §  26C* 

Effect  of  Payment  by  Party  Secondarily  Liable. 

§  263.  Where  the  instrument  is  paid  by  a  party  secondarily 
liable  thereon,  it  is  not  discharged;  but  the  party  so 
paying  it  is  remitted  to  his  former  rights  as  regards 
all  prior  parties,  and  he  may  strike  oat  his  own  and  all 
subsequent  indorsements,  and  again  negotiate  the  in- 
strument, except; 

1.  Where  it  is  payable  to  the  order  of  a  third  person, 
and  has  been  paid  by  the  drawer;  and 

2.  Where  it  was  made  or  accepted  for  accommodation, 
and  has  been  paid  by  the  party  accommodated. 

Payment  by  person  secondarily  liable  does  not  discharge  instru- 
ment. 

Where  the  instrument  is  paid  to  a  party  secondarily  liable 
thereon,  it  is  not  discharged;  but  the  party  so  paying  it  is  re- 
mitted to  his  former  rights  as  regards  all  prior  parlies,'^^  except 
where  the  instrument  is  payable  to  the  order  of  a  third  person 
and  has  been  paid  by  the  drawer,^"  or  where  it  has  been  made 
or  accepted  for  accommodation,  and  has  been  paid  by  the  party 
accommodated.^^  This  section  is  intended  to  apply  where  the  per- 

79Neg.  Inst.  Laws  Colo.,  Conn.,  D.  C,  Fla.,  Idaho,  Iowa,  Ky.,  La., 
Mass.,  Mo.,  Mont.,  Nev.,  N.  H.,  N.  J.,  N.  M.,  N.  C,  N.  D.,  Okl.,  Or.,  Pa., 
Tenn.,  Utah,  Va.,  Wash.,  W.  Va.,  Wyo.  (§  121);  Ariz.  (§  3424);  111. 
(§  120);  Kan.  (§  128);  Md.  (§  146);  Mich.  (§  123);  Neb.  (§  120);  N.  Y. 
(§  202);  Ohio   (§  3175-L);   R.  I.   (§  129);  Wis.   (§  1679-2). 

French  v.  Jarvis,  29  Conn.  347;  Eaton  v.  Carey,  27  Mass.  (10  Pick.)  211; 
Stevens  v.  Hannan,  88  Mich.  13,  49  N.  W.  874,  afg.  86  Mich.  305,  48  N.  W. 
951,  24  Am.  St.  Rep.  125;  Havens  v.  Huntington,  1  Cow.  (N.  Y.)  387; 
Davis  V.  Miller,  14  Grat.  (Va.)  1. 

SOSame   sections  negotiable  instruments  laws  last  cited. 

Payment  by  indorser  discharges  his  own  liability  and  that  of  all  sub- 
sequent indorsers.     Keazer  v.  Colebrook  Nat.  Bank  (N.  H.)  IZ  Atl.  170. 

SlSame   sections  negotiable  instruments   laws  last  cited. 

Marling  v.  Jones,  138  Wis.  82,  119  N.  W.  931. 


§  264  PRESUMPTIONS.  339 

eon  secondarily  liable  can  trace  his  title  on  the  face  of  the  note, 
and  its  indorsements  through  the  prior  parties  whom  he  seeks  to 
hold.^2  Subsequent  indorsement  must  be  held  to  mean  subsequent 
in  point  of  liability .^^  A  payment  by  an  indorser  does  not  ex- 
tinguish the  holder's  rights  against  the  maker, — for,  as  between 
the  maker  and  the  indorser,  the  transaction  is  a  purchase  and 
not  a  payment.^'* 

Same — Striking  out  indorsements,  and  issuing  instrument. 

On  payment  by  a  party  secondarily  liable,  he  may  strike  out  his 
own  and  all  subsequent  indorsements  and  again  negotiate,  except, 
where  it  is  payable  to  the  order  of  a  third  person,  and  has  been 
paid  by  the  drawer,  and  where  it  was  made  or  accepted  for  ac- 
commodation, and  has  been  paid  by  the  party  accommodated.^^ 


Presumptions. 

§  264.    An  outstanding  instrument  is  prima  facie  presumed  a 
subsisting  obligation. 

The  presumption  that  outstanding  instrument  in  the  hands  of 
the  original  payee  is  a  subsisting  undischarged  obligation,  while 

82Quimby  v.  Varnum,  190  Mass.  211,  76  N.  E.  671. 

83Quimby  v.  Varnum,  190  Mass.  211,  76  N.  E.  671.  Thus,  where  an  in- 
dorser before  delivery  paid  the  note  and  the  payee  before  delivering  it  to 
him  struck  out  his  indorsement,  held  he  could  not  renegotiate  the  note. 
Id.     Has  action  against  maker  but  not  on  note.  Id. 

84Madison  Square  Bank  v.  Pierce,  137  N.  Y.  444,  33  N.  E.  557,  33  Am. 
St.  Rep.  751,  20  L.  R.  A.  335,  afg.  62  Hun,  493,  17  N.  Y.  Supp.  270. 

85Same  sections  of  negotiable  instruments  laws  as  last  above  cited. 

Payment  by  an  indorser  leaves  the  instrument  still  negotiable  as  to 
prior  parties.  French  v.  Jarvis,  29  Conn.  347;  Eaton  v.  Carey,  27  Mass. 
(10  Pick.)  211;  Davis  v.  Miller,  14  Grat.  (Va.)  1.  Reissuance  by  accommo- 
dation indorser  after  payment  by  him,  see  Kirksey  v.  Bates,  1  Ala.  303. 
Right  of  contribution  between  accommodation  indorsers  on  payment  by 
one  or  more  of  their  number,  see  Kelly  v.  Burrough.  102  N.  Y.  93,  6 
N.  E.  109;  Hull  v.  Myers,  90  Ga.  674,  16  S.  E.  653;  Hagerthy  v.  Phillips, 
83  Me.  336,  22  Atl.  223;  Newcomb  v.  Gibson,  127  Mass.  393. 


340  PAYMENT  AND   DISCHARGE.  §  265 

very  strong,  is  not  conclusive,^  and  where  it  is  met  by  opposing 
presumptions  arising  out  of  the  fact  of  the  case,  the  question 
of  payment  becomes  one  of  fact.^'' 


Eenewal  of  Liability. 

§  265.     After  discharge,  a  renewal  of  liability,  by  an  indorser, 
must  be  by  a  new  contract. 

An  indorser  having  been  entirely  discharged  from  liability, 
any  renewal  of  his  liability  must  be  by  a  new  contract.s^  It  follows 
that  the  giving  of  a  new  check  or  note  after  the  loss  or  distruc- 
tion  of  a  former  one  is  of  itself  alone  ambiguous  and  may  evince 
intent  to  enter  into  new  relations,  or  merely  supply  evidence 
of  those  already  existing,  according  to  the  surrounding  circum- 
stances.^^ 

86In  re  McMichan's  Estate,  220  Pa.  187,  69  Atl.  596. 

87In  re  McMichan's  Estate,  220. Pa.  187,  69  Atl.  596.  Presumption  held 
rebutted  where  subsequent  to  its  date  the  payee  had  in  his  hands  the 
means  of  payment  which  he  made  no  attempt  to  apply  but  paid  over 
without  deduction.     Id. 

ssAebi  V.  Bank  of  Evansville,  124  Wis.  7Z,  102  N.  W.  329,  109  Am.  St. 
Rep.  925,  68  L.  R.  A.  964. 

89Aebi  V.  Bank  of  Evansville,  124  Wis.  IZ,  102  N.  W.  329,  109  Am.  St. 
Rep.  925,  68  L.  R.  A.  964.  Where  new  check  was  dated  back  to  date  of 
lost  one  and  marked  "duplicate,"  held  not  a  new  contract.     Id. 


APPENDIX  A. 


ORIGINAL  DRAFT   OF   THE   NEGOTIABLE   INSTRUMENT 

LAW  AS  SUBMITTED  TO  THE  VARIOUS  STATE 

LEGISLATURES  AND  TO  CONGRESS. 

The  section  numbers  given  are  those  of  the  Original  Draft  and 
are  the  numbers  used  in  the  law  as  adopted  in  Alabama,  Colorado, 
Connecticut,  District  of  Columbia,  Florida,  Hawaii,  Idaho,  Iowa, 
Kentucky,  Louisiana,  Massachusetts,  Missouri,  Montana,  Nevada, 
New  Jersey,  New  Mexico,  North  Carolina,  North  Dakota, 
Oklahoma,  Oregon,  Pennsylvania,  Tennessee,  Utah,  Virginia, 
"Washington,  West  Virginia  and  Wyoming. 

The  section  numbers  of  the  law  as  adopted  in  Arizona,  Illinois, 
Kansas,  Maryland,  Michigan,  Nebraska,  New  Hampshire,  New 
York,  Ohio,  Rhode  Island  and  Wisconsin  differ  from  those  here- 
with given  and  may  be  found  by  consulting  Appendix  "B"  where 
references  are  given  from  all  the  sections  as  found  in  the  Original 
Draft  to  the  corresponding  sections  in  the  law  as  adopted  in  the 
states  just  mentioned.  The  numbers  in  brackets  at  the  end  of  the 
various  sections  or  part  of  the  act  as  here  printed  refer  to  the 
pages  of  this'  work  where  the  subject-matter  of  the  section  in 
question  is  considered. 


341 


TITLE  I. 

NEGOTIABLE    INSTRUMENTS    IN    GENERAL. 

ARTICLE  I. 

FORM  AND  INTERPRETATION. 

§  1.     Be  it  enacted,  etc.,  An  instrument  to  be  negotiable  must 
conform  to  the  following  requirements  [41]  : — 

1.  It  must  be  in  writing  and  signed  by  the  maker  or  drawer 

[18,  28,  40]  ; 

2.  Must  contain  an  unconditional  promise  or  order  to  pay  a  sum 

certain  in  money  [45,  48,  55,  62,  194]  ; 

3.  Must  be  payable  on  demand,  or  at  a  fixed  or  determinable 

future  time   [64]  ; 

4.  Must  be  payable  to  order  or  to  bearer  [71]  ;  and, 

5.  Where  the  instrument  is  addressed  to  a  drawee,  he  must  be 

named  or  otherwise  indicated  therein  with  reasonable  cer- 
tainty [83]. 
§  2.     The  sum  payable  is  a  sum  certain  within  the  meaning  of 
this  act,  although  it  is  to  be  paid  [55]  : — 

1.  "With  interest  [55]  ;  or 

2.  By  stated  instalments  [56]  ;  or 

3.  By  stated  instruments,  with  a  provision  that  upon  default  in 

payment  of  any  instalment  or  of  interest,  the  whole  shall 
become  due  [57]  ;  or 

342 


APPENDIX.  343 

4.  With  exchange,  whether  at  a  fixed  rate  or  at  the  current  rate 

[58]  ;  or 

5.  With  costs  of  collection  or  an  attorney's  fee,  in  case  payment 

shall  not  be  made  at  maturity  [59]. 
§  3.     An  unqualified  order  or  promise  to  pay  is  unconditional 
within  the  meaning  of  this  act,  though  coupled  with : — 

1.  An  indication  of  a  particular  fund  out  of  which  reimburse- 

ment is  to  be  made,  or  a  particular  account  to  be  debited 
with  the  amount  [50]  ;  or 

2.  A  statement  of  the  transaction  which  gives  rise  to  the  instru- 

ment [51,52]. 
But  an  order  or  promise  to  pay  out  of  a  particular  fund  is  not 

unconditional   [52]. 
§  4.     An  instrument  is  payable  at  a  determinable  future  time, 
within  the  meaning  of  this  act,  which  is  expressed  to  be  payable : — 

1.  At  a  fixed  period  after  date  or  sight  [67]  ;  or 

2.  On  or  before  a  fixed  or  determinable  future  time  specified 

therein  [69]  ;  or 

3.  On  or  at  a  fixed  period  after  the  occurrence  of  a  specified 

event,  which  is  certain  to  happen,  though  the  time  of  hap- 
pening be  uncertain  [70]. 

An  instrument  payable  upon  a  contingency  is  not  negotiable,  and 
the  happening  of  the  event  does  not  cure  the  defect  [70]. 
§  5.     An  instrument  which  contains  an  order  or  promise  to  do 

any  act  in  addition  to  the  payment  of  money  is  not  negotiable 

[91].     But  the  negotiable  character  of  an  instrument  otherwise 

negotiable  is  not  affected  by  a  provision  which : — 

1.  Authorizes  the  sale  of  collateral  securities  in  case  the  instru- 

ment be  not  paid  at  maturity  [86]  ;  or 

2.  Authorizes  a  confession  of  judgment  if  the  instrument  be  not 

paid  at  maturity  [89]  ;  or 

3.  Waives  the  benefit  of  any  law  intended  for  the  advantage  or 

protection  of  the  obligator  [89]  ;  or 

4.  Gives  the  holder  an  election  to  require  something  to  be  done 

in  lieu  of  payment  of  money  [90]. 
But  nothing  in  this  section  shall  validate  any  provision  or  stipula- 
tion otherwise  illegal  [90]. 


344  NEGOTIABLE  INSTRUMENTS  LAW. 

§  6.     The  validity  and  negotiable  character  of  an  instrument  are 
not  affected  by  the  fact  that  [142]  :— 

1.  It  is  not  dated  [19,  42]  ;  or 

2.  Does  not  specify  the  value  given,  or  that  any  value  has  been 

given  therefor  [44]  ;  or 
'.i.     Does  not  specify  the  place  where  it  is  drawn  or  the  place  where 
it  is  payable  [19,  85]  ;  or 

4.  Bears  a  seal  [43]  ;  or 

5.  Designates  a  particular  kind  of  current  money  in  which  pay- 

ment is  to  be  made  [63]. 
But  nothing  in  this  section  shall  alter  or  repeal  any  statute  re- 
quiring in  certain  cases  the  nature  of  the  consideration  to 
be  stated  in  the  instrument  [44]. 
§  7.     An  instrument  is  payable  on  demand : — 

1.  Where  it  is  expressed  to  be  payable  on  demand,  or  at  sight, 

or  on  presentation  [65]  ;  or 

2.  In  which  no  time  for  payment  is  expressed  [66]. 

Where  an  instrument  is  issued,  accepted,  or  indorsed  when  over- 
due, it  is,  as  regards  the  person  so  issuing,  accepting,  or 
indorsing  it,  payable  on  demand  [66]. 
§  8,     The  instrument  is  payable  to  order  when  it  is  drawn  pay- 
able to  the  order  of  a  specified  person  or  to  him  or  his  erder  [73]. 
-  It  may  be  drawn  payable  to  the  order  of: — 

1.  A  payee  who  is  not  maker,  drawer,  or  drawee  [73]  ;  or 

2.  The  drawer  or  maker  [73]  ;  or 

3.  The  drawee  [74]  ;  or 

4.  Two  or  more  payees  jointly  [74]  ;  or 

5.  One  or  some  of  several  payees  [12,  13,  75,  84]  ;  or 

6.  The  holder  of  an  office  for  the  time  being  [75]. 

Where  the  instrument  is  payable  to  order  the  payee  must  be 
named  or  otherwise  indicated  therein  with  reasonable  cer- 
tainty [81]. 
§  9.     The  instrument  is  payable  to  bearer  [76,  82]  : — 

1.  When  it  is  expressed  to  be  so  payable  [76]  ;  or 

2.  When  it  is  payable  to  a  person  named  therein  or  bearer  [76]  ; 

or 

3.  When  it  is  payable  to  the  order  of  a  fictitious  or  nonexisting 


APPENDIX.  345 

person,  and  such  fact  was  known  to  the  person  making  it 
so  payable  [77]  ;  or 

4.  When  the  name  of  the  payee  does  not  purport  to  be  the  name 

of  any  person  [SO]  ;  or 

5.  When  the  only  or  last  indorsement  is  an  indorsement  in  blank 

[81,170]. 

§  10.  The  instrument  need  not  follow  the  language  of  this  act 
but  any  terms  are  sufficient  which  clearly  indicate  an  intention  to 
conform  to  the  requirements  hereof  [41]. 

§  11,  Where  the  instrument  or  an  acceptance  or  any  indorse- 
ment thereon  is  dated,  such  date  is  deemed  prima  facie  to  be  the 
true  date  of  the  making,  drawing,  acceptance,  or  indorsement  as 
the  case  may  be  [21,  132,  142,  183]. 

§  12.  The  instrument  is  not  invalid  for  the  reason  only  that  it 
is  antedated  or  postdated,  provided  this  is  not  done  for  an 
illegal  or  fraudulent  purpose.  The  person  to  whom  an  instru- 
ment so  dated  is  delivered  acquires  the  title  thereto  as  of  the  date 
of  delivery  [23]. 

§  13.  Where  an  instrument  expressed  to  be  payable  at  a  fixed 
period  after  date  is  issued  undated,  or  where  the  acceptance  of  an 
instrument  paj^able  at  a  fixed  period  after  sight  is  undated,  any 
holder  may  insert  therein  the  true  date  of  issue  or  accept  nee,  and 
the  instrument  shall  be  payable  accordingly  [20,  141].  The  in- 
sertion of  a  wrong  date  does  not  avoid  the  instrument  in  the  hands 
of  a  subsequent  holder  in  due  course,  but,  as  to  him,  the  date  so 
inserted  is  to  be  regarded  as  the  true  date  [22,  141]. 

§  14.  Where  the  instrument  is  wanting  in  any  material  parti- 
cular, the  person  in  possession  thereof  has  a  prima  facie  authority 
to  complete  it  by  filling  up  the  blanks  therein  [24].  And  a  signa- 
ture on  a  blank  paper  delivered  by  the  person  making  the  signa- 
ture in  order  that  the  paper  may  be  converted  into  a  negotiable 
instrument  operates  as  a  prima  facie  authority  to  fill  it  up  as  such 
for  any  amount  [25] .  In  order,  however,  that  any  such  instrument 
when  completed  may  be  enforced  against  any  person  who  became 
a  party  thereto  prior  to  its  completion,  it  must  be  filled  up  strictly 
in  accordance  with  the  authority  given  and  within  a  reasonable 
time  [21,  26,  142].    But  if  any  such  instrument,  after  completion, 


346  NEGOTIABLE  INSTRUMENTS  LAW. 

is  negotiated  to  a  holder  in  due  course,  it  is  valid  and  effectual  for 
all  purposes  in  his  hands,  and  he  may  enforce  it  as  if  it  had  been 
ftlled  up  strictly  in  accordance  with  the  authority  given  and  with- 
in a  reasonable  time  [27,  235]. 

§  15.  Where  an  incomplete  instrument  has  not  been  delivered 
it  will  not,  if  completed  and  negotiated,  without  authority,  be  a 
valid  contract  in  the  hands  of  any  holder,  as  against  any  person 
whose  signature  was  placed  thereon  before  delivery  [24,  237]. 

§  16.  Every  contract  on  a  negotiable  instrument  is  incomplete 
and  revocable  until  delivery  of  the  instrument  for  the  purpose  of 
giving  effect  thereto  [35,  163,  167].  As  between  immediate 
parties,  and  as  regards  a  remote  party  other  than  a  holder  in  due 
course,  the  delivery,  in  order  to  be  effectual,  must  be  made  either 
by  or  under  the  authority  of  the  party  making,  drawing,  accept- 
ing, or  indorsing,  as  the  case  may  be  [36,  164],  and  in  such  case 
the  delivery  may  be  shown  to  have  been  conditional,  or  for  a 
special  purpose  only,  and  not  for  the  purpose  of  transferring  the 
property  in  the  instrument  [36,  164].  But  where  the  instrument 
is  in  the  hands  of  a  holder  in  due  course,  a  valid  delivery  thereof 
by  all  parties  prior  to  him  so  as  to  make  them  liable  to  him  is 
conclusively  presumed  [164].  And  where  the  instrument  is  no 
longer  in  the  possession  of  a  party  whose  signature  appears  there- 
on, a  valid  and  intentional  delivery  by  him  is  presumed  until  the 
contrary  is  proved  [37,  164,  238]. 

§  17.  Where  the  language  of  the  instrument  is  ambiguous,  or 
there  are  omissions  therein,  the  following  rules  of  construction 
apply  :— 

1.  Where  the  sum  payable  is  expressed  in  words  and  also  in 

figures  and  there  is  a  discrepancy  between  the  tAvo,  the  sura 
denoted  by  the  words  is  the  sum  payable ;  but  if  the  words 
are  ambiguous  or  uncertain,  references  may  be  had  to  the 
figures  to  fix  the  amount  [107]  ; 

2.  Where  the  instrument  provides  for  the  payment  of  interest, 

without  specifying  the  date  from  which  interest  is  to  run, 
the  interest  runs  from  the  date  of  the  instrument,  and  if  the 
instrument  is  undated,  from  the  issue  thereof  [108]  ; 

3.  Where  the  instrument  is  not  dated,  it  will  be  considered  to  be 

dated,  as  of  the  time  it  was  issued  [20,  42,  109] ; 


APPENDIX.  347 

4.  Where  there  is  a  conflict  between  the  written  and  printed  pro- 

visions of  the  instrument,  the  written  provisions  prevail 
[110]  ; 

5.  Where  the  instrument  is  so  ambiguous  that  there  is  doubt 

whether  it  is  a  bill  or  note,  the  holder  may  treat  it  as  either 
at  his  election  [111]  ; 

6.  Where  a  signature  is  so  placed  upon  the  instrument  that  it  is 

not  clear  in  what  capacity  the  person  making  the  same  in- 
tended to  sign,  he  is  to  be  deemed  an  indorser  [111,  195]  ; 

7.  Where  an  instrument  containing  the  words  "I  promise  to  pay" 

is  signed  by  two  or  more  persons,  they  are  deemed  to  be 
jointly  and  severally  liable  thereon  [111,  112], 

§  18.  No  person  is  liable  on  the  instrument  whose  signature 
does  not  appear  thereon,  except  as  herein  otherwise  expressly 
provided.  But  one  who  signs  in  a  trade  or  assumed  name  will  be 
liable  to  the  same  extent  as  if  he  had  signed  in  his  own  name 
[30,31,189,243]. 

§  19.  The  signature  of  any  party  may  be  made  by  a  duly  au- 
thorized agent.  No  particular  form  of  appointment  is  necessary 
for  this  purpose ;  and  the  authority  of  the  agent  may  be  established 
as  in  other  cases  of  agency  [30]. 

§  20.  Where  the  instrument  contains  or  a  person  adds  to  his 
signature  words  indicating  that  he  signs  for  or  on  behalf  of  a 
principal,  or  in  a  representative  capacity,  he  is  not  liable  on  the 
instrument  if  he  was  duly  authorized  [31]  ;  but  the  mere  addition 
of  words  describing  him  as  an  agent,  or  as  filling  a  representative 
character,  without  disclosing  his  principal,  does  not  exempt  him 
from  personal  liability  [32]. 

§  21.  A  signature  by  "procuration"  operates  as  notice  that  the 
agent  has  but  a  limited  authority  to  sign,  and  the  principal  is 
bound  only  in  case  the  agent  in  so  signing  acted  within  the  actual 
limits  of  his  authority  [34]. 

§  22.  The  indorsement  or  assignment  of  the  instrument  by  a 
corporation  or  by  an  infant  passes  the  property  therein,  notwith- 
standing that  from  want  of  capacity  the  corporation  or  infant 
may  incur  no  liability  thereon  [179,  205]. 

§  23.     Where  a  signature  is  forged  or  made  without  the  au- 


348  NEGOTIABLE  INSTRUMENTS  LAW. 

thority  of  the  person  whose  signature  it  purports  to  be,  it  is 
wholly  inoperative,  and  no  right  to  retain  the  instrument,  or  to 
give  a  discharge  therefor,  or  to  enforce  payment  thereof  against 
any  party  thereto,  can  be  acquired  through  or  under  such  signa- 
ture, unless  the  party,  against  whom  it  is  sought  to  enforce  such 
right,  is  precluded  from  setting  up  the  forgery  or  want  of 
authority  [307]. 

AETICLE  II. 

CONSIDERATION. 

§  24.  Every  negotiable  instrument  is  deemed  prima  facie  to 
have  been  issued  for  a  valuable  consideration,  and  every  person 
whose  signature  appears  thereon  to  have  become  a  party  thereto 
for  value  [92,  93,  139]. 

§  25.  Value  is  any  consideration  sufficient  to  support  a  simple 
contract  [95].  An  antecedent  or  pre-existing  debt  constitutes 
value,  and  is  deemed  such  whether  the  instrument  is  payable  on 
demand  or  at  a  future  time  [95,  139,  219]. 

§  26.  Where  value  has  at  any  time  been  given  for  the  instru- 
ment, the  holder  is  deemed  a  holder  for  value  in  respect  to  all 
parties  who  became  such  prior  to  that  time  [218]. 

§  27,  Where  the  holder  has  a  lien  on  the  instrument,  arising 
either  from  contract  or  by  implication  of  law,  he  is  deemed  a 
holder  for  value  to  the  extent  of  his  lien  [98,  219]. 

§  28.  Absence  or  failure  of  consideration  is  matter  of  defense 
as  against  any  person  not  a  holder  in  due  course ;  and  partial 
failure  of  consideration  is  a  defense  pro  tanto,  whether  the  failure 
is  an  ascertained  and  liquidated  amount  or  otherwise  [99,  100]. 

§  29.  An  accommodation  party  is  one  who  has  signed  the 
instrument  as  maker,  drawer,  acceptor,  or  indorser,  without  re- 
ceiving value  therefor,  and  for  the  purpose  of  lending  his  name 
to  some  other  person.  Such  a  person  is  liable  on  the  instrument  to 
a  holder  for  value,  notwithstanding  such  holder  at  the  time  of 
taking  the  instrument  knew  him  to  be  only  an  accommodation 
party  [102,104,220]. 


APPENDIX.  349 

ARTICLE  III. 

NEGOTIATION. 

§  30.  An  instrument  is  negotiated  when  it  is  transferred  from 
one  person  to  another  in  such  manner  as  to  constitute  the  trans- 
feree the  holder  thereof  [1G2].  If  payable  to  bearer  it  is  nego- 
tiated by  deliver}^;  if  payable  to  order  it  is  negotiated  by  the 
indorsement  of  the  holder  completed  by  delivery  [162,  167]. 

§  31.  The  indorsement  must  be  written  on  the  instrument  itself 
or  upon  a  paper  attached  thereto  [165].  The  signature  of  the 
indorser,  without  additional  words,  is  a  sufficient  indorsement 
[168]. 

§  32.  The  indorsement  must  be  an  indorsement  of  the  entire 
instrument  [167].  An  indorsement,  which  purports  to  transfer  to 
the  indorsee  a  part  only  of  the  amount  payable,  or  which  purports 
to  transfer  the  instrument  to  two  or  more  indorsees  severally, 
does  not  operate  as  a  negotiation  of  the  instrument  [167].  But 
where  the  instrument  has  been  paid  in  part,  it  may  be  indorsed  as 
to  the  residue  [168]. 

§  33.  An  indorsement  may  be  either  special  [169]  or  in  blank 
[172]  ;  and  it  may  also  be  either  restrictive  [172]  or  qualified 
[176],  or  conditional  [177]. 

§  34.  A  special  indorsement  specifies  the  person  to  whom,  or 
to  whose  order,  the  instrument  is  to  be  payable  [169]  ;  and  the 
indorsement  of  such  indorsee  is  necessary  to  the  further  negotia- 
tion of  the  instrument  [170].  An  indorsement  in  blank  specifies 
no  indorsee,  and  an  instrument  so  indorsed  is  payable  to  bearer, 
and  may  be  negotiated  by  delivery   [172]. 

§  35.  The  holder  may  convert  a  blank  indorsement  into  a 
special  indorsement  by  writing  over  the  signature  of  the  indorser 
in  blank  any  contract  consistent  with  the  character  of  the  indorse- 
ment [171]. 

§  36.     An  indorsement  is  restrictive,  which  either : — 

1.  Prohibits  the  further  negotiation  of  the  instrument  [173]  ;  or 

2.  Constitutes  the  indorsee  the  agent  of  the  indorser  [173]  ;  or 


350  NEGOTIABLE  INSTRUMENTS  LAW. 

3.     Vests  the  title  in  the  indorsee  in  trust  for  or  to  the  use  of 

some  other  person  [174]. 
But  the  mere  absence  of  words  implying  power  to  negotiate  does 

not  make  an  indorsement  restrictive  [173]. 
§  37.     A  restrictive  indorsement  confers  upon  the  indorsee  the 
right : — 

1.  To  receive  payment  of  the  instrument  [174]  ; 

2.  To  bring  any  action  thereon  that  the  indorser  could  bring 

[175]  ; 

3.  To  transfer  his  rights  as  such  indorsee,  where  the  form  of  the 

indorsement  authorizes  him  to  do  so  [175]. 
But  all  subsequent  indorsees  acquire  only  the  title  of  the  first 
indorsee  under  the  restrictive  indorsement  [175]. 

§  38.  A  qualified  indorsement  constitutes  the  indorser  a  mere 
assignor  of  the  title  to  the  instrument  [176].  It  may  be  made  by 
adding  to  the  indorser 's  signature  the  words  "without  recourse" 
or  any  words  of  similar  import  [176].  Such  an  indorsement  does 
not  impair  the  negotiable  character  of  the  instrument  [176]. 

§  39.  Where  an  indorsement  is  conditional,  a  party  required 
to  pay  the  instrument  may  disregard  the  condition,  and  make 
payment  to  the  indorsee  or  his  transferee,  whether  the  condition 
has  been  fulfilled  or  not  [177].  But  any  person  to  whom  an 
instrument  so  indorsed  is  negotiated  will  hold  the  same,  or  the 
proceeds  thereof,  subject  to  the  rights  of  the  person  indorsing 
conditionally  [178]. 

§  40.  Where  an  instrument,  payable  to  bearer,  is  indorsed 
specially,  it  may  nevertheless  be  further  negotiated  by  delivery 
[170],  but  the  person  indorsing  specially  is  liable  as  indorser  to 
only  such  holders  as  make  title  through  his  indorsement  [170, 
209]. 

§  41.  Where  an  instrument  is  payable  to  the  order  of  two  or 
more  payees  or  indorsees  who  are  not  partners,  all  must  indorse, 
unless  the  one  indorsing  has  authority  to  indorse  for  the  others 
[179]. 

§  42.  Where  an  instrument  is  drawn  or  indorsed  to  a  person 
as  "Cashier"  or  other  fiscal  officer  of  a  bank  or  corporation,  it  is 
deemed  prima  facie  to  be  payable  to  the  bank  or  corporation  of 


APPENDIX.  351 

which  he  is  such  officer;  and  may  be  negotiated  by  either  the 
indorsement  of  the  bank  or  corporation,  or  the  indorsement  of 
the  officer  [181]. 

§  43.  AVhere  the  name  of  a  payee  or  indorsee  is  wrongly  desig- 
nated or  misspelled,  he  may  indorsee  the  instrument  as  therein 
described,  adding,  if  he  think  fit,  his  proper  signature  [168]. 

§  44.  Where  any  person  is  under  obligation  to  indorse  in  a 
representative  capacity,  he  may  indorse  in  such  terms  as  to 
negative  personal  liability  [181]. 

§  45.  Except  where  an  indorsement  bears  date  after  the 
maturity  of  the  instrument,  every  negotiation  is  deemed  prima 
facie  to  have  been  effected  before  the  instrument  was  overdue 
[183,  215]. 

§  46.  Except  where  the  contrary  appears,  every  indorsement  is 
presumed  prima  facie  to  have  been  made  at  the  place  where  the 
instrument  is  dated  [184]. 

§  47.  An  instrument  negotiable  in  its  origin  continues  to  be 
negotiable  until  it  has  been  restrictively  indorsed  or  discharged 
by  payment  or  otherwise  [186]. 

§  48.  The  holder  may  at  any  time  strike  out  any  indorsement 
which  is  not  necessary  to  his  title  [185].  The  indorser  whose  in- 
dorsement is  struck  out,  and  all  indorsers  subsequent  to  him,  are 
thereby  relieved  from  liability  on  the  instrument  [186]. 

§  49.  Where  the  holder  of  an  instrument  payable  to  his  order 
transfers  it  for  value  without  indorsing  it,  the  transfer  vests  in 
the  transferee  such  title  as  the  transferror  had  therein,  and  the 
transferee  acquires,  in  addition,  the  right  to  have  the  indorse- 
ment of  the  transferror  [162] .  But  for  the  purpose  of  determining 
whether  the  transferee  is  a  holder  in  due  course,  the  negotiation 
takes  effect  as  of  the  time  when  the  indorsement  is  actually  made 
[163,216]. 

§  50.  Where  an  instrument  is  negotiated  back  to  a  prior  party, 
such  party  may,  subject  to  the  provisions  of  this  act,  reissue  and 
further  negotiate  the  same.  But  he  is  not  entitled  to  enforce  pay- 
ment thereof  against  any  intervening  party  to  whom  he  was 
personally  liable  [187]. 


352  NEGOTIABLE  INSTRUMENTS  LAW. 

ARTICLE  IV. 
RIGHTS  OF  HOLDER. 

§  51.  The  holder  of  a  negotiable  instrument  may  sue  thereon 
in  his  own  name  [210]  ;  and  payment  to  him  in  due  course  dis- 
charges the  instrument  [160,  321]. 

§  52.  A  holder  in  due  course  is  a  holder  who  has  taken  the 
instrument  under  the  following  conditions : — 

1.  That  it  is  complete  and  regular  upon  its  face  [213]  ; 

2.  That  he  became  the  holder  of  it  before  it  was  overdue,  and 

without  notice  that  it  had  been  previously  dishonored,  if 
such  was  the  fact  [214]  ; 

3.  That  he  took  it  in  good  faith  [216]  and  for  value  [217]. 

4.  That  at  the  time  it  was  negotiated  to  him  he  had  no  notice  of 

any  infirmity  in  the  instrument  or  defect  in  the  title  of  the 
person  negotiating  it  [222]. 

§  53.  Where  an  instrument  payable  on  demand  is  negotiated 
an  unreasonable  length  of  time  after  its  issue,  the  holder  is  not 
deemed  a  holder  in  due  course  [100,  215]. 

§  54.  Where  the  transferee  receives  notice  of  any  infirmity  in 
the  instrument  or  defect  in  the  title  of  the  person  negotiating  the 
same  before  he  has  paid  the  full  amount  agreed  to  be  paid  there- 
for, he  will  be  deemed  a  holder  in  due  course  only  to  the  extent  of 
the  amount  theretofore  paid  by  him  [223]. 

§  55.  The  title  of  a  person  who  negotiates  an  instrument  is 
defective  within  the  meaning  of  this  act  when  he  obtained  the  in- 
strument, or  any  signature  thereto,  by  fraud,  duress,  or  force  and 
fear,  or  other  unlawful  means,  or  for  an  illegal  consideration,  or 
when  he  negotiates  it  in  breach  of  faith,  or  under  such  circum- 
stances as  amount  to  a  fraud  [223]. 

§  56.  To  constitute  notice  of  an  infirmity  in  the  instrument  or 
defect  in  the  title  of  the  person  negotiating  the  same,  the  person 
to  whom  it  is  negotiated  must  have  had  actual  knowledge  of  the 
infirmity  or  defect,  or  knowledge  of  such  facts  that  his  action  in 
taking  the  instrument  amounted  to  bad  faith  [225]. 


APPENDIX.  353 

§  57.  A  holder  in  due  course  holds  the  instrument  free  from 
any  defect  of  title  of  prior  parties,  and  free  from  defenses  avail- 
able to  prior  parties  among  themselves,  and  may  enforce  payment 
of  the  instrument  for  the  full  amount  thereof  against  all  parties 
liable  thereon  [212,  238]. 

§  58.  In  the  hands  of  any  holder  other  than  a  holder  in  due 
course,  a  negotiable  instrument  is  subject  to  the  same  defenses 
as  if  it  were  non-negotiable  [240].  But  a  holder  v^ho  derives  his 
title  through  a  holder  in  due  course,  and  who  is  not  himself  a 
party  to  any  fraud  or  illegality  affecting  the  instrument,  has  all 
the  rights  of  such  former  holder  in  respect  of  all  parties  prior  to 
the  latter [241]. 

§  59.  Every  holder  is  deemed  prima  facie  to  be  a  holder  in  due 
course  [228]  ;  but  when  it  is  shown  that  the  title  of  any  person 
who  has  negotiated  the  instrument  was  defective,  the  burden  is 
on  the  holder  to  prove  that  he  or  some  person  under  whom  he 
claims  acquired  the  title  as  holder  in  due  course  [229].  But  the 
last  mentioned  rule  does  not  apply  in  favor  of  a  party  who  became 
bound  on  the  instrument  prior  to  the  acquisition  of  such  defective 
title  [230]. 

ARTICLE  V. 
LIABILITIES  OF  PARTIES. 

§  60.  The  maker  of  a  negotiable  instrument  by  making  it  en- 
gages that  he  will  pay  it  according  to  its  tenor,  and  admits  the 
existence  of  the  payee  and  his  capacity  to  endorse  [189,  190]. 

§  61.  The  drawer  by  drawing  the  instrument  admits  the  ex- 
istence of  the  payee  and  his  then  capacity  to  indorse;  and  engages 
that  on  due  presentment  the  instrument  will  be  accepted  or  paid, 
or  both,  according  to  its  tenor,  and  that  if  it  be  dishonored,  and 
the  necessary  proceedings  on  dishonor  be  duly  taken,  he  will  pay 
the  amount  thereof  to  the  holder,  or  to  any  subsequent  indorser 
who  may  be  compelled  to  pay  it.  But  the  drawer  may  insert  in 
the  instrument  an  express  stipulation  negativing  or  limiting  his 
own  liability  to  the  holder  [190,  191]. 

Opp— Sel.— 23 


354  NEGOTIABLE  INSTRUMENTS  LAW. 

§  62.  The  acceptor  by  accepting  the  instrument  engages  that 
he  will  pay  it  according  to  the  tenor  of  his  acceptance  [192,  194]  ; 
and  admits : — 

1.  The  existence  of  the  drawer,  the  genuineness  of  his  signature, 

and  his  capacity  and  authority  to  draw  the  instrument  [192, 
193,  194,  310]  ;  and 

2.  The  existence  of  the  payee  and  his  then  capacity  to  indorse 

[193,  195]. 

§  63.  A  person  placing  his  signature  upon  an  instrument  other- 
wise than  as  maker,  drawer  or  acceptor,  is  deemed  to  be  an  in- 
dorser,  unless  he  clearly  indicates  by  appropriate  words  his  in- 
tention to  be  bound  in  some  other  capacity  [111,  196]. 

§  64.  Where  a  person,  not  otherwise  a  party  to  an  instrument, 
places  thereon  his  signature  in  blank  before  delivery,  he  is  liable 
as  indorser  in  accordance  with  the  following  rules : — 

1.  If  the  instrument  is  payable  to  the  order  of  a  third  person,  he 

is  liable  to  the  payee  and  to  all  subsequent  parties  [199]  ; 

2.  If  the  instrument  is  payable  to  the  order  of  the  maker  or 

drawer,  or  is  payable  to  bearer,  he  is  liablie  to  all  parties 
subsequent  to  the  maker  or  drawer  [199]  ; 

3.  If  he  signs  for  the  accommodation  of  the  payee,  he  is  liable 

to  all  parties  subsequent  to  the  payee  [199]. 
§  65.     Every  person  negotiating  an  instrument  by  delivery  or 
by  a  qualified  indorsement,  warrants : — 

1.  That  the  instrument  is  genuine  and  in  all  respects  what  it 

purports  to  be  [202,  309]  ; 

2.  That  he  has  a  good  title  to  it  [202]  ; 

3.  That  all  prior  parties  had  capacity  to  contract  [202]  ; 

4.  That  he  has  no  knowledge  of  any  fact  which  would  impair  the 

validity  of  the  instrument  to  render  it  valueless  [203]. 

But  when  the  negotiation  is  by  delivery  only,  the  warranty  ex- 
tends in  favor  of  no  holder  other  than  the  immediate  trans- 
feree [203]. 

The  provisions  of  subdivision  three  of  this  section  do  nof  apply 
to  persons  negotiating  public  or  corporate  securities  other 
than  bills  and  notes  [202]. 


APPENDIX.  355 

§  66.  Every  indorser  who  indorses  without  qnalifieation  [20,3] 
warrants  to  all  subsequent  holders,  in  due  course  [204]  : — 

1.  The  matters  and  things  mentioned  in  subdivisions  one,  two 

and  three  of  the  next  preceding  section  [205]  ;  and 

2.  That  the  instrument  is  at  the  time  of  his  indorsement  valid 

and  subsisting  [206]. 
And,  in  addition,  he  engages  that  on  due  presentment,  it  shall  be 
accepted  or  paid,  or  both,  as  the  case  may  be,  according  to 
its  tenor,  and  that  if  it  be  dishonored,  and  the  necessary 
proceedings  on  dishonor  be  duly  taken,  he  will  pay  the 
amount  thereof  to  the  holder,  or  to  any  subsequent  indorser 
who  may  be  compelled  to  pay  it  [206]. 
§  67.     Where  a  person  places  his  indorsement  on  an  instrument 
negotiable  by  delivery  he  incurs  all  the  liabilities  of  an  indorser 
[197]. 

§  68.  As  respects  one  another,  indorsers  are  liable  prima  facie  in 
the  order  in  which  they  indorse  [207]  ;  but  evidence  is  admissible 
to  show  that  as  between  or  among  themselves  they  have  agreed 
otherwise  [208].  Joint  payees  or  joint  indorsees  who  indorse  are 
deemed  to  indorse  jointly  and  severally  [199,  209]. 

§  69.  Where  a  broker  or  other  .agent  negotiates  an  instrument 
without  indorsement,  he  incurs  all  the  liabilities  prescribed  by 
section  sixty-five  of  this  act,  unless  he  discloses  the  name  of  his 
principal,  and  the  fact  that  he  is  acting  only  as  agent  [210] . 


AETICLE  VL 

PRESENTMENT  FOR  PAYMENT. 

§  70.  Presentment  for  payment  is  not  necessary  in  order  to 
charge  the  person  primarily  liable  on  the  instrument  [243]  ;  but 
if  the  instrument  is,  by  its  terms,  payable  at  a  special  place,  and 
he  is  able  and  willing  to  pay  it  there  at  maturity,  such  ability  and 
willingness  are  equivalent  to  a  tender  of  payment  upon  his  part 
[244].  But  except  as  herein  provided,  presentment  for  paj'ment 
is  necessary  in  order  to  charge  the  drawer  and  indorsers  [245]. 


356  NEGOTIABLE  INSTRUMENTS  LAW. 

§  71.  "Where  the  instrument  is  not  payable  on  demand,  present- 
ment must  be  made  on  the  day  it  falls  due  [254].  Where  it  is 
payable  on  demand,  presentment  must  be  made  within  a  reason- 
able time  after  its  issue,  except  that,  in  the  case  of  a  bill  of  ex- 
change, presentment  for  payment  will  be  sufficient  if  made  within 
a  reasonable  time  after  the  last  negotiation  thereof  [255]. 

§  72.  Presentment  for  payment,  to  be  sufficient,  must  be 
made : — 

1.  By  the  holder,  or  by  some  person  authorized  to  receive  pay- 

ment on  his  behalf  [246]  ; 

2.  At  a  reasonable  hour  on  a  business  day  [250]  ; 

3.  At  a  proper  place  as  herein  defined  [261]  ; 

4.  To  the  person  primarily  liable  on  the  instrument,  or  if  he  is 

absent  or  inaccesible  to  any  person  found  at  the  place  where 
the  presentment  is  made   [247]. 
§  73.     Presentment  for  payment  is  made  at  the  proper  place : — 

1.  ^V'here  a  place  of  payment  is  specified  in  the  instrument  and 

it  is  there  presented  [261]  ; 

2.  Where  no  place  of  payment  is  specified,  but  the  address  of  the 

person  to  make  payment  is  given  in  the  instrument  and  it 
is  there  presented  [262]  ; 

3.  Where  no  place  of  payment  is  specified  and  no  address  is 

given  and  the  instrument  is  presented  at  the  usual  place 
of  business  or  residence  of  the  person  to  make  payment 
[86,  262]  ; 

4.  In  any  other  case  if  presented  to  the  person  to  make  payment 

wherever  he  can  be  found,  or  if  presented  at  his  last  known 
place  of  business  or  residence  [263]. 

§  74.  The  instrument  must  be  exhibited  to  the  person  from 
whom  payment  is  demanded,  and  when  it  is  paid  must  be  delivered 
up  to  the  party  paying  it  [263,  329]. 

§  75.  Where  the  instrument  is  payable  at  a  bank,  presentment 
for  payment  must  be  made  during  banking  hours,  unless  the  per- 
son to  make  payment  has  no  funds  there  to  meet  it  at  any  time 
during  the  day,  in  which  case  presentment  at  any  hour  before  the 
bank  is  closed  on  that  day  is  sufficient  [250]. 


APPENDIX.  357 

§  76.  Where  the  person  primarily  liable  on  the  instrument  is 
dead,  and  no  place  of  payment  is  specified,  presentment  for  pay- 
ment must  be  made  to  his  personal  representative,  if  such  there 
be,  and  if,  with  the  exercise  of  reasonable  diligence,  he  can  be 
found  [2-lS]. 

§  77.  Where  the  persons  primarily  liable  on  the  instrument  are 
liable  as  partners,  and  no  place  of  payment  is  specified,  present- 
ment for  payment  may  be  made  to  any  one  of  them,  even  though 
there  has  been  a  dissolution  of  the  firm  [248]. 

§  78.  Where  there  are  several  persons,  not  partners,  primarily 
liable  on  the  instrument,  and  no  place  of  payment  is  specified, 
presentment  must  be  made  to  them  all  [24"8]. 

§  79.  Presentment  for  payment  is  not  required  in  order  to 
charge  the  drawer  where  he  has  no  right  to  expect  or  require  that 
the  drawee  or  acceptor  will  pay  the  instrument  [245]. 

§  80.  Presentment  for  payment  is  not  required  in  order  to 
charge  an  indorser  where  the  instrument  was  made  or  accepted  for 
his  accommodation  and  he  has  no  reason  to  expect  that  the  instru- 
ment will  be  paid  if  presented  [246]. 

§  81.  Delay  in  making  presentment  for  payment  is  excused 
when  the  delay  is  caused  by  circumstances  beyond  the  control  of 
the  holder,  and  not  imputable  to  his  default,  misconduct  or  neg- 
ligence [259].  When  the  cause  of  delay  ceases  to  operate,  pre- 
sentment must  be  made  with  reasonable  diligence  [260]. 

§  82.     Presentment  for  payment  is  dispensed  with : — 

1.  Where  after  the  exercise  of  reasonable  diligence  presentment 

as  required  by  this  act  cannot  be  made  [249,  264]  ; 

2.  Where  the  drawee  is  a  fictitious  person  [265]  ; 

3.  By  waiver  of  presentment,  express  or  implied  [265]. 

§  83.     The  instrument  is  dishonored  by  nonpayment  when: — 

1.  It  is  duly  presented  for  payment  and  payment  is  refused  or 

cannot  be  obtained  [266]  ;  or 

2.  Presentment  is  excused  and  the  instrument  is  overdue  and  un- 

paid [266]. 
§  84.     Subject  to  the  provisions  of  this  act,  when  the  instrument 
is  dishonored  by  nonpayment,  an  immediate  right  of  recourse  to  all 
parties  secondarily  liable  thereon  accrues  to  the  holder  [267]. 


358  NEGOTIABLE  INSTRUMENTS  LAW. 

§  85.  Every  negotiable  instrument  is  payable  at  the  time  fixed 
therein  without  grace  [253] .  When  the  day  of  maturity  falls  upon 
Sunday,  or  a  holiday,  the  instrument  is  payable  on  the  next  suc- 
ceeding business  day  [252],  Instruments  falling  due  on  Saturday 
are  to  be  presented  for  payment  on  the  next  succeeding  business 
day,  except  that  instruments  payable  on  demand  may,  at  the 
option  of  the  holder,  be  presented  for  payment  before  twelve 
o'clock  noon  on  Saturday  when  that  entire  day  is  not  a  holiday 
[15,  123,  252]. 

§  86.  Where  the  instrument  is  payable  at  a  fixed  period  after 
date,  after  sight,  or  after  the  happening  of  a  specified  event,  the 
time  of  payment  is  determined  by  excluding  the  day  from  which 
the  time  is  to  begin  to  run,  and  by  including  the  date  of  payment 
[254]. 

§  87.  Where  the  instrument  is  made  payable  at  a  bank  it  is 
equivalent  to  an  order  to  the  bank  to  pay  the  same  for  the  account 
of  the  principal  debtor  thereon  [325]. 

§  88.  Payment  is  made  in  due  course  when  it  is  made  at  or 
after  the  maturity  of  the  instrument  to  the  holder  thereof  in  good 
faith  and  without  notice  that  his  title  is  defective  [322], 

ARTICLE  VII. 

NOTICE  OF  DISHONOR. 

§  89.  Except  as  herein  otherwise  provided,  when  a  negotiable 
instrument  has  been  dishonored  by  nonacceptance  or  nonpayment, 
notice  of  dishonor  must  be  given  to  the  drawer  and  to  each  in- 
dorser,  and  any  drawer  or  indorser  to  whom  such  notice  is  not 
given  is  discharged  [281]. 

§  90.  The  notice  may  be  given  by  or  on  behalf  of  the  holder,  or 
by  or  on  behalf  of  any  party  to  the  instrument  who  might  be  com- 
pelled to  pay  it  to  the  holder,  and  who,  upon  taking  it  up,  would 
have  a  right  to  reimbursement  from  the  party  to  whom  the  notice 
is  given  [285,  286]. 


APPENDIX.  359 

§  91.  Notice  of  dishonor  may  be  given  by  an  agent  either  in 
his  own  name  or  in  the  name  of  any  party  entitled  to  give  notice, 
whether  that  party  be  his  principal  or  not  [286]. 

§  92.  Where  notifee  is  given  by  or  on  behalf  of  the  holder,  it 
enures  for  the  benefit  of  all  subsequent  holders  and  all  prior 
parties  who  have  a  right  of  recourse  against  the  party  to  whom  it 
is  given  [287]. 

§  93.  Where  notice  is  given  by  or  on  behalf  of  a  party  entitled 
to  give  notice,  it  enures  for  the  benefit  of  the  holder  and  all  parties 
subsequent  to  the  party  to  whom  notice  is  given  [288]. 

§  94.  Where  the  instrument  has  been  dishonored  in  the  hands 
of  an  agent,  he  may  either  himself  give  notice  to  the  parties  liable 
thereon,  or  he  may  give  notice  to  his  principal  [287].  If  he  give 
notice  to  his  principal,  he  must  do  so  within  the  same  time  as  if  he 
were  the  holder,  and  the  principal  upon  the  receipt  of  such  notice 
has  himself  the  same  time  for  giving  notice  as  if  the  agent  had 
been  an  independent  holder  [299]. 

§  95.  A  written  notice  need  not  be  signed,  and  an  insufficient 
written  notice  may  be  supplemented  and  validated  by  verbal  com- 
munication [292].  A  misdescription  of  the  instrument  does  not 
vitiate  the  notice  unless  the  party  to  whom  the  notice  is  given  is 
in  fact  misled  thereby  [293]. 

§  96,  The  notice  may  be  in  writing  or  merely  oral  and  may  be 
given  in  any  terms  which  sufficiently  identify  the  instrument,  and 
indicate  that  it  has  been  dishonored  by  nonacceptance  or  nonpay- 
ment [2«)2].  It  may  in  all  cases  be  given  by  delivering  it  per- 
sonally or  through  the  mails  [294]. 

§  97.  Notice  of  dishonor  may  be  given  either  to  the  party  him- 
self or  to  his  agent  in  that  behalf  [289]. 

§  98.  When  any  party  is  dead,  and  his  death  is  known  to  the 
party  giving  notice,  the  notice  must  be  given  to  a  personal  repre- 
sentative, if  there  be  one,  and  if  with  reasonable  diligence  he  can 
be  found  [289].  If  there  be  no  personal  representative,  notice 
may  be  sent  to  the  last  residence  or  last  place  of  business  of  the 
deceased.     [290]. 

§  99.  Where  the  parties  to  be  notified  are  partners,  notice  to 
any  one  partner  is  notice  to  the  firm,  even  though  there  has  been  a 
dissolution  [290]. 


360  NEGOTIABLE  INSTRUMENTS  LAW. 

§  100.  Notice  to  joint  parties  who  are  not  partners  must  be 
given  to  each  of  them,  unless  one  of  them  has  authority  to  receive 
such  notice  for  the  others  [290]. 

§  101.  Where  a  party  has  been  adjudged  a  bankrupt  or  an  in- 
solvent, or  has  made  an  assignment  for  the  benefit  of  creditors, 
notice  may  be  given  either  to  the  party  himself  or  to  his  trustees 
or  assignee   [291]. 

§  102.  Notice  may  be  given  as  soon  as  the  instrument  is  dis- 
honored; and  unless  delay  is  excused  as  hereinafter  provided, 
must  be  given  within  the  times  fixed  by  this  act  [296], 

§  103.  Where  the  person  giving  and  the  person  to  receive 
notice  reside  in  the  same  place,  notice  must  be  given  within  the 
following  times : — 

1.  If  given  at  the  place  of  business  of  the  person  to  receive  notice, 

it  must  be  given  before  the  close  of  business  hours  on  the 
day  following  [297]  ; 

2.  If  given  at  his  residence,  it  must  be  given  before  the  usual 

hours  of  rest  on  the  day  following  [297]  ; 

3.  If  sent  by  mail,  it  must  be  deposited  in  the  post  office  in  time  to 

reach  him  in  the  usual  course  on  the  day  following  [297]. 
§  104.     Where   the  person   giving  and  the  person  to   receive 
notice  reside  in  different  places,  the  notice  must  be  given  within 
the  following  times  : — 

1.  If  sent  by  mail,  it  must  be  deposited  in  the  post  office  in  time 

to  go  by  mail  the  day  following  the  day  of  dishonor,  or 
if  there  be  no  mail  at  a  convenient  hour  on  that  day,  by  the 
next  mail  thereafter  [298]  ; 

2.  If  given  otherwise  than  through  the  post  office,  then  within  the 

time  that  notice  would  have  been  received  in  due  course  of 
mail,  if  it  had  been  deposited  in  the  post  office  within  the 
time  specified  in  the  last  subdivision  [298]. 
§  105.     AVhere  notice  of  dishonor  is  duly  addressed  and  depos- 
ited in  the  post  office,  the  sender  is  deemed  to  have  given  due 
notice,  notwithstanding  any  miscarriage  in  the  mails  [295]. 

§  106.  Notice  is  deemed  to  have  been  deposited  in  the  post 
office  when  deposited  in  any  branch  post  office  or  in  any  letter  box 
under  the  control  of  the  post  office  department  [295]. 


APPENDIX.  361 

§  107.  Where  a  party  receives  notice  of  dishonor,  he  has,  after 
the  receipt  of  such  notice,  the  same  time  for  giving  notice  to  ante- 
cedent parties  that  the  holder  has  after  the  dishonor  [298]. 

§  108.  Where  a  party  has  added  an  address  to  his  signature, 
notice  of  dishonor  must  be  sent  to  that  address  [300]  ;  but  if  he 
has  not  given  such  address,  then  the  notice  must  be  sent  as  fol- 
lows : — 

1.  Either  to  the  post  office  nearest  to  his  place  of  residence,  or  to 

the  post  office  where  he  is  accustomed  to  receive  his  letters 
[300]  ;  or 

2.  If  he  live  in  one  place,  and  have  his  place  of  business  in  an- 

other, notice  may  be  sent  to  either  place  [301]  ;  or 

3.  If  he  is  sojourning  in  another  place,  notice  may  be  sent  to  the 

place  where  he  is  sojourning  [301]. 
But  where  the  notice  is  actually  received  by  the  party  within  the 
time  specified  in  this  act,  it  will  be  sufficient,  though  not 
sent  in  accordance  with  the  requirements  of  this  section 
[300]. 

§  109.  Notice  of  dishonor  may  be  waived,  either  before  the  time 
of  giving  notice  has  arrived,  or  after  the  omission  to  give  duo 
notice  and  the  waiver  may  be  express  or  implied  [303,  304]. 

§  110.  Where  the  waiver  is  embodied  in  the  instrument  itself, 
it  is  binding  upon  all  parties;  but  where  it  is  written  above  the 
signature  of  an  indorser,  it  binds  him  only  [305]. 

§  111.  A  waiver  of  protest,  whether  in  the  case  of  a  foreign 
bill  of  exchange  or  other  negotiable  instrument,  is  deemed  to  be  a 
waiver  not  only  of  a  formal  protest,  but  also  of  presentment  and 
notice  of  dishonor  [266,  276,  304]. 

§  112.  Notice  of  dishonor  is  dispensed  with  when,  after  the 
exercise  of  reasonable  diligence,  it  cannot  be  given  to  or  does  not 
reach  the  parties  sought  to  be  charged  [302]. 

§  113.  Delay  in  giving  notice  of  dishonor  is  excused  when  the 
delay  is  caused  by  circumstances  beyond  the  control  of  the  holder, 
and  not  imputable  to  his  default,  misconduct  or  negligence  [305]. 
When  the  cause  of  delay  ceases  to  operate,  notice  must  be  given 
with  reasonable  diligence  [305] . 


362  NEGOTIABLE  INSTRUMENTS  LAW. 

§  114,  Notice  of  dishonor  is  not  required  to  be  given  to  the 
drawer  in  either  of  the  following  cases : — 

1.  "When  the  drawer  and  drawee  are  the  same  person  [283]  ; 

2.  When  the  drawee  is  a  fictitious  person  or  a  person  not  having 

capacity  to  contract  [283]  ; 

3.  When  the  drawer  is  the  person  to  whom  the  instrument  is 

presented  for  payment  [283]  ; 

4.  Where  the  drawer  has  no  right  to  expect  or  require  that  the 

drawee  or  acceptor  will  honor  the  instrument  [283]  ; 

5.  Where  the  drawer  has  countermanded  payment   [283]. 

§  115.  Notice  of  dishonor  is  not  required  to  be  given  to  an  in- 
dorser  in  either  of  the  following  cases : — 

1.  Where  the  drawee  is  a  fictitious  person  or  a  person  not  having 

capacity  to  contract,  and  the  indorser  was  aware  of  the  fact 
at  the  time  he  indorsed  the  instrument  [284]  ; 

2.  Where  the  indorser  is  the  person  to  whom  the  instrument  is 

presented  for  payment  [284]  ; 

3.  Where  the  instrument  was  made  or  accepted  for  his  accommo- 

dation [285]. 

§  116.  Where  due  notice  of  dishonor  by  nonacceptance  has 
been  given,  notice  of  a  subsequent  dishonor  by  nonpayment  is 
not  necessary,  unless  in  the  meantime  the  instrument  has  been  ac- 
cepted [303]. 

§  117.  An  omission  to  give  notice  of  dishonor  by  nonacceptance 
does  not  prejudice  the  rights  of  a  holder  in  due  course  subsequent 
to  the  omission  [306], 

§  118.  AVhere  any  negotiable  instrument  has  been  dishonored 
it  may  be  protested  for  nonacceptance  or  nonpayment,  as  the  case 
may  be ;  but  protest  is  not  required  except  in  the  case  of  foreign 
bills  of  exchange  [269]. 

ARTICLE  VIII. 

DISCHARGE  OF  NEGOTIABLE  INSTRUMENTS. 

§  119.     A  negotiable  instrument  is  discharged : — 
1.     By  payment  in  due  course  by  or  on  behalf  of  the  principal 
debtor  [320] ; 


APPENDIX.  36r5 

2.  By  payment  in  due  course  by  the  party  accommodated,  where 

the   instrument  is   made   or  accepted  for   accommodation 
[321]  ; 

3.  By  the  intentional  cancellation  thereof  by  the  holder  [324]  ; 

4.  By  any  other  act  which  will  discharge  a  simple  contract  far 

the  payment  of  money  [324]  ; 

5.  When  the  principal  debtor  becomes  the  holder  of  the  instru- 

ment at  or  after  maturity  in  his  own  right  [324]. 
§  120.     A  person  secondarily  liable  on  the  instrument  is  dis- 
charged : — 

1.  By  an  act  which  discharges  the  instrument  [333]  ; 

2.  By  the  intentional  cancellation  of  his  signature  by  the  holder 

[333]  ; 

3.  By  the  discharge  of  a  prior  party  [333]  ; 

4.  By  a  valid  tender  of  payment  made  by  a  prior  party  [334]  ; 

5.  By  a  release  of  the  principal  debtor  unless  the  holder's  right 

of  recourse  against  the  party  secondarily  liable  is  expressly 
reserved  [334]  ; 

6.  By  an  agreement  binding  upon  the  holder  to  extend  the  time 

of  payment,  or  to  postpone  the  holder's  right  to  enforce  the 
instrument,  unless  made  with  the  assent  of  the  party  sec- 
ondarily liable,  or  unless  the  right  of  recourse  against  such 
party  is  expressly  reserved  [334]. 
§  121.     Where  the  instrument  is  paid  by  a  party  secondarily 
liable  thereon,  it  is  not  discharged ;  but  the  party  so  paying  it  is 
remitted  to  his  former  rights  as  regards  all  prior  parties  [338],  and 
he  may  strike  out  his  own  and  all  subsequent  indorsements,  and 
again  negotiate  the  instrument  [339],  except: — 

1.  Where  it  is  payable  to  the  order  of  a  third  person,  and  has  been 

paid  by  the  drawer  [338]  ;  and 

2.  Where  it  was  made  or  accepted  for  accommodation,  and  has 

been  paid  by  the  party  accommodated  [338]. 
§  122.  The  holder  may  expressly  renounce  his  rights  against 
any  party  to  the  instrument,  before,  at  or  after  its  maturity.  An 
absolute  and  unconditional  renunciation  of  his  rights  against  the 
principal  debtor  made  at  or  after  the  maturity  of  the  instrument 
discharges  the  instrument.    But  a  renunciation  does  not  affect  the 


364  NEGOTIABLE  INSTRUMENTS  LAW. 

rights  of  a  holder  in  due  course  without  notice.  A  renunciation 
must  be  in  writing,  unless  the  instrument  is  delivered  up  to  the 
person  primarily  liable  thereon  [337]. 

§  123.  A  cancellation  made  unintentionally,  or  under  a  mis- 
take, or  without  the  authority  of  the  holder,  is  inoperative;  but 
v/here  an  instrument  or  any  signature  thereon  appears  to  have 
been  canceled,  the  burden  of  proof  lies  on  the  party  who  alleges 
that  the  cancellation  was  made  unintentionally,  or  under  a  mis- 
take or  without  authority  [324]. 

§  124.  Where  a  negotiable  instrument  is  materially  altered 
without  the  assent  of  all  parties  liable  thereto,  it  is  avoided,  ex- 
cept as  against  a  party  who  has  himself  made,  authorized  or  as- 
sented to  the  alteration,  and  subsequent  indorsers  [142,  311]. 

But  when  an  instrument  has  been  materially  altered  and  is  in 
the  hands  of  a  holder  in  due  course,  not  a  party  to  the  alteration, 
he  may  enforce  payment  thereof  according  to  its  original  tenor 
[312]. 

§  125.     Any  alteration  which  changes  [142]  : — 

1.  The  date  [315]  ; 

2.  The  sum  payable,  either  for  principal  or  interest  [315]  ; 

3.  The  time  or  place  of  payment  [315]  ; 

4.  The  number  or  the  relations  of  the  parties  [315]  ; 

5.  The  medium  of  currency  in  which  payment  is  to  be  made 

[316] ; 
Or  which  adds  a  place  of  payment  where  no  place  of  payment  is 
specified,  or  any  other  change  or  addition  which  alters  the 
effect  of  the  instrument  in  any  respect,  is  a  material  altera- 
tion [316]. 

TITLE  II. 

BILLS    OF   EXCHANGE. 
ARTICLE  I. 

FORM  AND  INTERPRETATION. 

§  126.     A  bill  of  exchange  is  an  unconditional  order  in  writing 
addressed  by  one  person  to  another,  signed  by  the  person  giving 


APPENDIX.  365 

it,  requiring  the  person  to  whom  it  is  addressed  to  pay  on  demand 
or  at  a  fixed  or  determinable  future  time  a  sum  certain  in  money 
to  order  or  to  bearer  [11,  138]. 

§  127.  A  bill  of  itself  does  not  operate  as  an  assignment  of  the 
funds  in  the  hands  of  the  drawee  available  for  the  payment  there- 
of, and  the  drawee  is  not  liable  on  the  bill  unless  and  until  he 
accepts  the  same  [114,  130,  244]. 

§  128.  A  bill  may  be  adressed  to  two  or  more  drawees  jointly, 
whether  they  are  partners  or  not ;  but  not  to  two  or  more  drawees 
in  the  alternative  or  in  succession  [12,  84]. 

§  129.  An  inland  bill  of  exchange  is  a  bill  which  is,  or  on  its 
face  purports  to  be,  both  drawn  and  payable  within  this  state. 
Any  other  bill  is  a  foreign  bill.  Unless  the  contrary  appears  on 
the  face  of  the  bill,  the  holder  may  treat  it  as  an  inland  bill  [13]. 

§  130.  Where  in  a  bill  drawer  and  drawee  are  the  same  person, 
or  where  the  drawee  is  a  fictitious  person,  or  a  person  not  having 
capacity  to  contract,  the  holder  may  treat  the  instrument,  at  his 
option,  either  as  a  bill  of  exchange  or  a  promissory  note  [110]. 

§  131.  The  drawer  of  a  bill  and  any  indorser  may  insert  there- 
on the  name  of  a  person  to  whom  the  holder  may  resort  in  case 
of  need,  that  is  to  say  in  case  the  bill  is  dishonored  by  nonac- 
ceptance  or  nonpayment.  Such  person  is  called  the  referee  in 
case  of  need.  It  is  in  the  option  of  the  holder  to  resort  to  the 
referee  in  case  of  need  or  not  as  he  may  see  fit  [128,  129,  267]. 

ARTICLE  II. 
ACCEPTANCE. 

§  132.  The  acceptance  of  a  bill  is  the  signification  by  the 
drawee  of  his  assent  to  the  order  of  the  drawer  [132].  The  ac- 
ceptance must  be  in  writing  and  signed  by  the  drawee  [133,  149]. 
It  must  not  express  that  the  drawee  will  perform  his  promise  by 
any  other  means  than  the  payment  of  money   [11,  138]. 

§  133.  The  holder  of  a  bill  presenting  the  same  for  acceptance 
may  require  that  the  acceptance  be  written  on  the  bill  and,  if 
such  request  is  refused,  may  treat  the  bill  as  dishonored  [135]. 


366  NEGOTIABLE  INSTRUMENTS  LAW. 

§  134.  "Where  an  acceptance  is  written  on  a  paper  other  than 
the  bill  itself,  it  does  not  bind  the  acceptor  except  in  favor  of  a 
person  to  whom  it  is  shown  and  who,  on  the  faith  thereof,  receives 
the  bill  for  value  [135]. 

§  135.  An  unconditional  promise  in  writing  to  accept  a  bill 
before  it  is  drawn  is  deemed  an  actual  acceptance  in  favor  of 
every  person  who,  upon  the  faith  thereof,  receives  the  bill  for 
value  [151,  152]. 

§  136.  The  drawee  is  allowed  twenty-four  hours  after  pre- 
sentment in  which  to  decide  whether  or  not  he  will  accept  the  bill ; 
but  the  acceptance  if  given  dates  as  of  the  day  of  presentation 

[141]. 

§  137.  Where  a  drawee  to  whom  a  bill  is  delivered  for  ac- 
ceptance destroys  the  same,  or  refuses  within  twenty-four  hours 
after  such  delivery,  or  within  such  other  period  as  the  holder  may 
allow,  to  return  the  bill  accepted  or  nonaccepted  to  the  holder,  he 
will  be  deemed  to  have  accepted  the  same  [135]. 

§  138.  A  bill  may  be  accepted  before  it  has  been  signed  by  the 
drawer,  or  while  otherwise  incomplete,  or  when  it  is  overdue,  or 
after  it  has  been  dishonored  by  a  previous  refusal  to  accept,  or  by 
nonpayment  [147].  But  when  a  bill  payable  after  sight  is  dis- 
honored by  nonacceptance  and  the  drawee  subsequently  accepts 
it,  the  holder,  in  the  absence  of  any  different  agreement,  is  entitled 
to  have  the  bill  accepted  as  of  the  date  of  the  first  presentment 
[147]. 

§  139.  An  acceptance  is  either  general  or  qualified.  A  general 
acceptance  assents  without  qualification  to  the  order  of  the 
drawer  [142].  A  qualified  acceptance  in  express  terms  varies  the 
effect  of  the  bill  as  drawn  [143]. 

§  140.  An  acceptance  to  pay  at  a  particular  place  is  a  general 
acceptance,  unless  it  expressly  states  that  the  bill  is  to  be  paid 
there  only  and  not  elsewhere  [145]. 

§  141.     An  acceptance  is  qualified  which  is: — 
1.     Conditional,  that  is  to  say,  which  makes  payment  by  the  ac- 
ceptor dependent  on  the  fulfillment  of  a  condition  therein 
stated  [144] ; 


APPENDIX.  367 

2.  Partial,  that  is  to  say,  an  acceptance  to  pay  part  of  the  amount 

for  which  the  bill  is  drawn  [144]  ; 

3.  Local,  that  is  to  say,  an  acceptance  to  pay  only  at  a  particular 

place  [145]  ; 

4.  Qualified  as  to  time  [145]  ; 

5.  The  acceptance  of  some  one  or  more  of  the  drawees,  but  not 

of  all  [145]. 
§  142.  The  holder  may  refuse  to  take  a  qualified  acceptance, 
and  if  he  does  not  obtain  an  unqualified  acceptance  he  may  treat 
the  bill  as  dishonored  by  nonacceptance  [146].  AVhere  a  qualified 
acceptance  is  taken,  the  drawer  and  indorsers  are  discharged 
from  liability  on  the  bill,  unless  they  have  expressly  or  impliedly 
authorized  the  holder  to  take  a  qualified  acceptance,  or  subse- 
quently assent  thereto  [146].  When  the  drawer  or  an  indorser 
receives  notice  of  a  qualified  acceptance,  he  must,  within  a  rea- 
sonable time,  express  his  dissent  to  the  holder,  or  he  will  be  deem- 
ed to  have  assented  thereto  [146], 

ARTICLE  III. 
PRESENTMENT  FOR  ACCEPTANCE. 

§  143.     Presentment  for  acceptance  must  be  made : — 

1.  Where  the  bill  is  payable  after  sight,  or  in  any  other  case, 

where   presentment   for  acceptance   is   necessary   in   order 
to  fix  the  maturity  of  the  instrument  [118]  ;  or 

2.  Where  the  bill  expressly  stipulates  that  it  shall  be  presented 

for  acceptance  [118]  ;  or 

3.  Where  the  bill  is  drawn  payable  elsewhere  than  at  the  resi- 

dence or  place  of  business  of  the  drawee  [118,  124]. 
In  no  other  case  is  presentment  for  acceptance  necessary  in  order 

to  render  any  party  to  the  bill  liable  [118]. 
§  144.  Except  as  herein  otherwise  provided,  the  holder  of  a 
bill  which  is  required  by  the  next  preceding  section  to  be  present- 
ed for  acceptance  must  either  present  it  for  acceptance  or  nego- 
tiate it  within  a  reasonable  time.  If  he  fail  to  do  so,  the  drawer 
and  all  indorsers  are  discharged  [121]. 


368  NEGOTIABLE  INSTRUMENTS  LAW. 

§  145.  Presentment  for  acceptance  must  be  made  by  or  on 
behalf  of  the  holder  [124]  at  a  reasonable  hour,  on  a  business  day 
and  before  the  bill  is  overdue,  to  the  drawee  or  some  person  au- 
thorized to  accept  or  refuse  acceptance  on  his  behalf  [122,  125]  ; 
and: 

1.  Where  a  bill  is  addressed  to  two  or  more  drawees  who  are  not 

partners,  presentment  must  be  made  to  them  all  unless  one 
has  authority  to  accept  or  refuse  acceptance  for  all,  in 
which  case  presentment  may  be  made  to  him  only  [126]  ; 

2.  "Where  the  drawee  is  dead,  presentment  may  be  made  to  his 

personal  representative    [126]  ; 

3.  Where   the   drawee   has   been   adjudged   a   bankrupt   or   an 

insolvent  or  has  made  an  assignment  for  the  benefit  of 
creditors,  presentment  may  be  made  to  him  or  to  his  trustee 
or  assignee    [126], 
§  146.     A  bill  may  be  presented  for  acceptance  on  any  day  on 
which  negotiable  instruments  may  be  presented  for  payment  under 
the   provisions   of   sections   seventy-two   and   eightj^-five   of   this 
act   [122].     When  Saturday  is  not  otherwise  a  holiday,  present- 
ment for  acceptance  may  be  made  before  twelve  o'clock  noon,  on 
that  day  [123]. 

§  147.  Where  the  holder  of  a  bill  drawn  payable  elsewhere 
than  at  the  place  of  business  or  the  residence  of  the  drawee  has  not 
time  with  the  exercise  of  reasonable  diligence  to  present  the  bill 
for  acceptance  before  presenting  it  for  payment  on  the  day  that 
it  falls  due,  the  delay  caused  by  presenting  the  bill  for  acceptance 
before  presenting  it  for  payment  is  excused  and  does  not  dis- 
charge the  drawers  and  indorsers  [123]. 

§  148.  Presentment  for  acceptance  is  excused  and  a  bill  may 
be  treated  as  dishonored  by  nonacceptance  in  either  of  the  follow- 
ing cases : — 

1.  Where  the  drawee  is  dead,  or  has  absconded,  or  is  a  fictitious 

person  or  a  person  not  having  capacity  to  contract  by  bill 
[119]  ; 

2.  Where,  after  the  exercise  of  reasonable  diligence,  present- 

ment cannot  be  made  [119] ; 


APPENDIX.  3G9 

3.     "Where,  although  presentment  has  been  irregular,  acceptance 
has  been  refused  on  some  other  ground  [119]. 
§  149.     A  bill  is  dishonored  by  nonaeceptance : — 

1.  When  it  is  duly  presented  for  acceptance  and  such  an  ac- 

ceptance as  is  prescribed  by  this  act  is  refused  or  cannot 
be  obtained  [127]  ;  or 

2.  "When  presentment  for  acceptance  is  excused  and  the  bill  i.' 

not  accepted  [127]. 

§  150.  Where  a  bill  is  duly  presented  for  acceptance  and  is 
nol  accepted  Avithin  the  prescribed  time,  the  person  presenting  i+ 
must  treat  the  bill  as  dishonored  by  nonaeceptance  or  he  loses  the 
right  of  recourse  against  the  drawer  and  indorsers  [128]. 

§  151.  When  a  bill  is  dishonored  by  nonaeceptance,  an  im- 
mediate right  of  recourse  against  the  drawers  and  indorsers 
accrues  to  the  holder  and  no  presentment  for  payment  is  nec- 
essary [128]. 


ARTICLE  IV. 
PROTEST. 

§  152.  Where  a  foreign  bill  appearing  on  its  face  to  be  such  is 
dishonored  by  nonaeceptance,  it  Diust  be  duly  protested  for  non- 
acceptance,  and  where  such  a  bill  has  not  previously  been  dis- 
honored by  nonaeceptance  is  dishonored  by  nonpayment,  it  rau.-;t 
be  duly  protested  for  nonpayment  [269].  If  it  is  not  so  protested, 
the  drawer  and  indorsers  are  aischarged  [269].  Where  a  bill 
does  not  appear  on  its  face  to  be  a  foreign  bill,  protest  thereof  iu 
case  of  dishonor  is  unnecessary  [128]. 

§  153.  The  protest  must  be  annexed  to  the  bill,  or  must  contain 
a  copy  thereof,  and  must  be  under  the  hand  and  seal  of  the  notary 
making  it  [271],  and  must  specify: — 

1.  The  time  and  place  of  presentment  [271]  ; 

2.  The  fact  that  presentment  was  made  and  the  manner  thereof 

[271]  ; 

3.  The  cause  or  reason  for  protesting  the  bill  [271] ; 

Opp.-Sel— 24 


370  NEGOTIABLE  INSTRUMENTS  LAW. 

4.     The  demand  made  and  the  answer  given,  if  any,  or  the  fact 
that  the  drawee  or  acceptor  could  not  be  found  [271]. 
§  154.     Protest  may  be  made  by : — 

1.  A  notary  public  [272]  ;  or 

2.  By  any  respectable  resident  of  the  place  where  the  bill  is  dis- 

honored, in  the  presence  of  two  or  more  credible  witnesses 
[273]. 

§  155.  "When  a  bill  is  protested,  such  protest  must  be  made  on 
the  day  of  its  dishonor,  unless  delay  is  excused  as  herein  pro- 
vided [273].  When  a  bill  has  been  duly  noted,  the  protest  may  be 
subsequently  extended  as  of  the  date  of  the  noting  [274]. 

§  156.  A  bill  must  be  protested  at  the  place  where  it  is  dis- 
honored, except  that  when  a  bill  drawn  payable  at  the  place  of 
business,  or  residence  of  some  person  other  than  the-  drawee,  has 
been  dishonored  by  nonacceptance,  it  must  be  protested  for  non- 
payment at  the  place  where  it  is  expressed  to  be  payable,  and  no 
further  presentment  for  payment  to,  or  demand  on,  the  drawee  is 
necessary  [275]. 

§  157.  A  bill  which  has  been  protested  for  nonacceptance  may 
be  subsequently  protested  for  nonpayment  [270]. 

§  158.  Where  the  acceptor  has  been  adjudged  a  bankrupt  or 
an  insolvent  or  has  made  an  assignment  for  the  benefit  of  cre- 
ditors, before  the  bill  matures,  the  holder  may  cause  the  bill  to  be 
protested  for  better  security  against  the  drawer  and  indorsers 
[274]. 

§  159.  Protest  is  dispensed  with  by  any  circumstances  which 
would  dispense  with  notice  of  dishonor  [277].  Delay  in  noting  or 
protesting  is  excused  when  delay  is  caused  by  circumstances  be- 
yond the  control  of  the  holder  and  not  imputable  to  his  default, 
misconduct,  or  negligence.  When  the  cause  of  delay  ceases  to 
operate,  the  bill  must  be  noted  or  protested  with  reasonable  dili- 
gence [278]. 

§  160.  Where  a  bill  is  lost  or  destroyed  or  is  wrongly  detained 
from  the  person  entitled  to  hold  it,  protest  may  be  made  on  a 
copy  or  written  particulars  thereof  [276]. 


APPENDIX.  371 

ARTICLE  V. 
ACCEPTANCE  FOR  HONOR. 

§  161.  Where  a  bill  of  exchange  has  been  protested  for  dis- 
honor b}'  nonacceptance  or  protested  for  better  security  and  is 
not  overdue,  any  person  not  being  a  party  already  liable  thereon 
may,  with  the  consent  of  the  holder,  intervene  and  accept  the  bill 
supra  protest  for  the  honor  of  any  party  liable  thereon  or  for  the 
honor  of  the  person  for  whose  account  the  bill  is  drawn.  The 
acceptance  for  honor  may  be  for  part  only  of  the  sum  for  which 
the  bill  is  drawn;  and  where  there  has  been  an  acceptance  fur 
honor  for  one  party,  there  may  be  a  further  acceptance  by  a 
different  person  for  the  honor  of  another  party  [153]. 

§  162.  An  acceptance  for  honor  supra  protest  must  be  in 
writing  and  indicate  that  it  is  an  acceptance  for  honor,  and  must 
be  signed  by  the  acceptor  for  honor  [154]. 

§  163.  Wl.  3rc  an  acceptance  for  honor  does  not  expressly 
state  for  whose  honor  it  is  made,  it  is  deemed  to  be  an  acceptance 
for  the  honor  of  the  drawer  [154]. 

§  164.  The  acceptor  for  honor  is  liable  to  the  holder  and  to  all 
parties  to  the  bill  subsequent  to  the  party  for  whose  honor  he  has 
accepted  [155]. 

§  165.  The  acceptor  for  honor  by  such  acceptance  engages  that 
he  will  on  due  presentment  pay  the  bill  according  to  the  terms  of 
his  acceptance,  provided  it  shall  not  have  been  paid  by  the 
drawee,  and  provided  also  that  it  shall  have  been  duly  presented 
for  payment  and  protested  for  nonpayment  and  notice  of  dis- 
honor given  to  him  [155]. 

§  166.  Where  a  bill  payable  after  sight  is  accepted  for  honor, 
its  maturity  is  calculated  from  the  date  of  the  noting  for  non- 
acceptance  and  not  from  the  date  of  the  acceptance  for  honor 
[156]. 

§  167.  Where  a  dishonored  bill  has  been  accepted  for  honor 
supra  protest  or  contains  a  reference  in  case  of  need,  it  must  be 
protested  for  nonpayment  before  it  is  presented  for  payment  to 
the  acceptor  for  honor  or  referee  in  case  of  need  [275]. 


372  NEGOTIABLE  INSTRUMENTS  LAW. 

§  168.  Presentment  for  payment  to  the  acceptor  for  honor 
must  be  made  as  follows  : — 

1.  If  it  is  to  be  presented  in  the  place  where  the  protest  for 

nonpayment  was  made,  it  must  be  presented  not  later  than 
the  day  following  its  maturity  [260]  ; 

2.  If  it  is  to  be  presented  in  some  other  place  than  the  place 

where  it  was  protested,  then  it  must  be  forwarded  within 
the  time  specified  in  section  one  hundred  and  four  [260] . 
§  169.     The  provisions  of  section  eighty-one  apply  where  there 
is   delay  in  making  presentment   to   the   acceptor   for  hoi-or   or 
referee  in  case  of  need  [260]. 

§  170.  When  the  bill  is  dishonored  by  the  acceptor  for  honor  it 
must  be  protested  for  nonpayment  by  him  [270]. 

ARTICLE  VL 
PAYMENT  FOR  HONOR. 

§  171.  Where  a  bill  has  been  protested  for  nonpayment,  any 
person  may  intervene  and  pay  it  supra  protest  for  the  honor  of 
any  person  liable  thereon  or  for  the  honor  of  the  person  for 
whose  account  it  was  drawn  [330]. 

§  172.  The  payment  for  honor  supra  protest  in  order  to 
operate  as  such  and  not  as  a  mere  voluntary  payment  must  be 
attested  by  a  notarial  act  of  honor  which  may  be  appended  to  the 
protest  or  form  an  extension  to  it  [331]. 

§  173.  The  notarial  act  of  honor  must  be  founded  on  a  declara- 
tion made  by  the  payer  for  honor  or  by  his  agent  in  that  behalf 
declaring  his  intention  to  pay  the  bill  for  honor  and  for  whose 
honor  he  pays  [331]. 

§  174.  Where  two  or  more  persons  offer  to  pay  a  bill  for  the 
honor  of  different  parties,  the  person  whose  payment  will  dis- 
charge most  parties  to  the  bill  is  to  be  given  the  preference  [331]. 

§  175.  Where  a  bill  has  been  paid  for  honor,  all  parties  sub- 
sequent to  the  party  for  whose  honor  it  is  paid  are  discharged, 
but  the  payer  for  honor  is  subrogated  for,  and  succeeds  to,  both 


APPENDIX.  ■    373 

the  rights  and  duties  of  the  holder  as  regards  the  party  for  whose 
honor  he  pays  and  all  parties  liable  to  the  latter  [331]. 

§  176.  Where  the  holder  of  a  bill  refuses  to  receive  payment 
supra  protest,  he  loses  his  right  of  recourse  against  any  party  who 
would  have  been  discharged  by  such  payment  [332]. 

§  177.  The  payer  for  honor,  on  paying  to  the  holder  the 
amount  of  the  bill  and  the  notarial  expenses  incidental  to  its 
dishonor,  is  entitled  to  receive  both  the  bill  itself  and  the  protest 
[332]. 


ARTICLE  VII. 

BILLS  IN  A  SET. 

§  178.  Where  a  bill  is  drawn  in  a  set,  eacli  part  of  the  set  being 
numbered  and  containing  a  reference  to  the  other  parts,  the  whole 
of  the  parts  constitutes  one  bill  [14]. 

§  179.  Where  two  or  more  parts  of  a  set  are  negotiated  to 
different  holders  in  due  course,  the  holder  whose  title  first  accrues 
is  as  between  such  holders  the  true  owner  of  the  bill  [184].  But 
nothing  in  this  section  affects  the  rights  of  a  person  who  in  due 
course  accepts  or  pays  the  part  first  presented  to  him  [184]. 

§  180,  Where  the  holder  of  a  set  indorses  two  or  more  parts 
to  different  persons,  he  is  liable  on  every  such  part,  and  every 
indorser  subsequent  to  him  is  liable  on  the  part  he  has  himself 
indorsed,  as  if  such  parts  were  separate  bills  [201]. 

§  181.  The  acceptance  may  be  written  on  any  part  and  it  must 
be  written  on  one  part  only  [147].  If  the  drawee  accepts  more 
than  one  part,  and  such  accepted  parts  are  negotiated  to  different 
holders  in  due  course,  he  is  liable  on  every  such  part  as  if  it  were  a 
separate  bill  [147]. 

§  182.  When  the  acceptor  of  a  bill  drawn  in  a  set  pays  it  with- 
out requiring  the  part  bearing  his  acceptance  to  be  delivered  up 
to  him,  and  that  part  at  maturity  is  outstanding  in  the  hands  of  a 
holder  in  due  course,  he  is  liable  to  the  holder  thereon  [329]. 


374  NEGOTIABLE  INSTRUMENTS  LAW. 

§  183.  Except  as  herein  otherwise  provided,  where  any  one 
part  of  a  bill  drawn  in  a  set  is  discharged  by  payment  or  other- 
wise, the  whole  bill  is  discharged  [328]. 


TITLE  III. 

PROMISSORY  NOTES  AND  CHECKS. 
ARTICLE  L 

§  184.  A  negotiable  promissory  note  within  the  meaning  of  this 
act  is  an  unconditional  promise  in  writing  made  by  one  person  to 
another  signed  by  the  maker  engaging  to  pay  on  demand,  or  at  a 
fixed  or  determinable  future  time,  a  sum  certain  in  money  to  order 
or  to  bearer.  Where  a  note  is  drawn  to  the  maker's  own  order,  it 
is  not  complete  until  indorsed  by  him  [5,  10,  71,  73]. 

§  185.  A  check  is  a  bill  of  exchange  drawn  on  a  bank  payable 
on  demand.  Except  as  herein  otherwise  provided,  the  provisions 
of  this  act  applicable  to  a  bill  of  exchange  payable  on  demand 
apply  to  a  check  [14,  15]. 

§  186.  A  check  must  be  presented  for  payment  within  a  rea- 
sonable time  after  its  issue  or  the  drawer  will  be  discharged  from 
liability  thereon  to  the  extent  of  the  loss  caused  by  the  delay 
[257]. 

§  187.  Where  a  check  is  certified  by  the  bank  on  which  it  is 
drawn,  the  certification  is  equivalent  to  an  acceptance  [148]. 

§  188.  Where  the  holder  of  a  check  procures  it  to  be  accepted 
or  certified,  the  draAver  and  all  indorsers  are  discharged  from 
liability  thereon  [150]. 

§  189.  A  check  of  itself  does  not  operate  as  an  assignment  of 
any  part  of  the  funds  to  the  credit  of  the  drawer  with  the  bank, 
and  the  bank  is  not  liable  to  the  holder,  unless  and  until  it  accepts 
or  certifies  the  check  [115,  148,  244].. 


APPENDIX.  375 

TITLE  IV. 

GENERAL  PROVISIONS. 

ARTICLE   L 

§  190.     This  act  shall  be  known  as  the  Negotiable  Instruments 
Law  [3]. 

§  191.     In  this  act  unless  the  context  otherwise  requires : — 
"Acceptance"  means  an  acceptance  completed  by  delivery  or 

notification  [16,  132]. 
"Action"  includes  counterclaim  and  set-off  [16]. 
"Bank"  includes  any  person  or  association  of  persons  carrying: 
on  the   business   of   banking,   whether  incorporated   or  not 
[16,  326]. 
"Bearer"  means  the  person  in  possession  of  a  bill  or  note  which 

is  payable  to  bearer  [16]. 
"Bill"  means  bill  of  exchange,  and  "note"  means  negotiable 

promissory  note  [16]. 
"Delivery"  means  transfer  of  possession,  actual  or  constructive, 

from  one  person  to  another  [4,  16,  35,  164] . 
"Holder"  means  the  payee  or  indorsee  of  a  bill  or  note,  who  is 

in  possession  of  it,  or  the  bearer  thereof  [16,  160,  162]. 
"Indorsement"  means  an  indorsement  completed  by  delivery 

[16,  167]. 
"Instrument"  means  negotiable  instrument  [16]. 
"Issue"  means  the  first  delivery  of  the  instrument,  complete  in 

form,  to  a  person  who  takes  it  as  a  holder  [16,  20]. 
"Person"  includes  a  body  of  persons,  whether  incorporated  or 

not  [16]. 
"Value"  means  valuable  consideration   [16]. 
"Written" .  includes   printed,    and    "writing"   includes   print 

[16,18]. 
§  192.     The  person  "primarily"  liable  on  an  instrument  is  the 
person  who  by  the  terms  of  the  instrument  is  absolutely  required 
to  pay  same.    All  other  parties  are  "secondarily"  liable  [244,  336]. 


376  NEGOTIABLE  INSTRUMENTS  LAW. 

§  193.  In  determining  what  is  a  "reasonable  time"  or  an  "un- 
reasonable time,"  regard  is  to  be  had  to  the  nature  of  the  instru- 
ment, the  usage  of  trade  or  business  (if  any)  with  respect  to  such 
instruments,  and  the  facts  of  the  particular  case  [26,  121,  14G, 
215,  256,  257]. 

§  194.  "Where  the  day,  or  the  last  day,  for  doing  any  act  herein 
required  or  permitted  to  be  done,  falls  on  Sunday  or  on  a  holiday, 
the  act  may  be  done  on  the  next  succeeding  secular  or  business 
day  [252]. 

§  195.  The  provisions  of  this  act  do  not  apply  to  negotiable 
instruments  made  and  delivered  prior  to  the  passage  hereof  [4]. 

§  196.  In  any  case  not  provided  for  in  this  act,  the  rules  of  the 
law  merchant  shall  govern  [7,  112,  113]. 

§  197.  Of  the  laws  enumerated  in  the  schedules  hereto  annex- 
ed, that  portion  specified  in  the  last  column  is  repealed  [See 
Appendix  "D"]. 

§  198.     This   chapter  shall   take   effect   on [See 

Appendix  "C"]. 


APPENDIX  B. 


TABLE  TO  FURTHER  FACILITATE  THE  FINDING  OF  PAR- 
ALLEL SECTIONS  OF  THE  NEGOTIABLE  INSTRUMENTS 
LAWS. 

The  section  numbers  in  the  Original  Draft  of  the  Negotiable 
Instruments  Law  are  the  numbers  used  in  the  law  as  adopted  in 
Alabama,  Colorado,  Connecticut,  District  of  Columbia,  Florida, 
Hawaii,  Idaho,  Iowa,  Kentucky,  Louisiana,  Massachusetts, 
Missouri,  Montana,  Nevada,  New  Hampshire,  New  Jersey,  New 
Mexico,  North  Carolina,  North  Dakota,  Oklahoma,  Oregon,  Penn- 
sylvania, Tennessee,  Utah,  Virginia,  Washington,  West  Virginia, 
and  Wyoming. 

In  the  states  of  Arizona,  Illinois,  Kansas,  Maryland,  Michigan, 
Nebraska,  New  York,  Ohio,  Rhode  Island  and  Wisconsin,  the 
section  numbers  of  the  law  as  adopted  have  been  changed  from 
that  as  found  in  the  Original  Draft. 

The  table  below  is  for  the  purpose  of  facilitating  the  finding 
of  the  corresponding  sections  either  in  the  Original  Draft,  and 
hence  in  the  states  which  have  adopted  the  section  numbers  of 
the  Original  Draft,  or  in  those  other  states  where  the  numbers 
have  been  changed.  Having  the  proper  section  in  the  Original 
Draft  the  table  here  given  renders  it  easy  to  find  the  parallel 
sections  in  the  other  states,  and  vice  versa.  Also  by  referring  from 
the  section  number  of  the  Original  Draft  to  the  corresponding  sec- 
tion number  in  the  Act  as  given  in  Appendix  "A,"  the  place  where 
that  section  is  treated  in  this  work  may  be  found. 


377 


373 


NEGOTIABLE  INSTRUMENTS  LAW. 


Original 
Draft        Ariz. 


111. 


Kan.       Md.      Mich.      Neb.     N.  Y. 


Ohio 


R.  I. 


Wis. 


§  1 

§3304 

§  1 

§  8 

§  20 

§  3 

§  1 

§  20 

§  3171 

§  9 

§  1675—1 

2 

3305 

2 

9 

21 

4 

2 

21 

3171a 

10 

1675—2 

3 

3306 

3 

10 

22 

5 

3 

22 

3171b 

11 

1675—3 

4 

3307 

4 

11 

23 

6 

4 

23 

3171c 

12 

167.5—4 

5 

3308 

5 

12 

24 

7 

5 

24 

317  Id 

13 

167,5—5 

6 

3309 

6 

13 

25 

8 

6 

25 

3171e 

14 

1675—6 

7 

3310 

7 

14 

26 

9 

7 

26 

317  If 

15 

1675—7 

8 

3311 

8 

15 

27 

10 

8 

27 

3171g 

16 

1675—8 

9 

3312 

9 

16 

28 

11 

9 

28 

317111 

17 

1675—9 

10 

3313 

10 

17 

29 

12 

10 

29 

31711 

17 

1675—10 

11 

3314 

11 

18 

30 

13 

11 

30 

3171J 

19 

1675—11 

12 

3;J15 

12 

19 

31 

14 

12 

31 

3171k 

20 

1675—12 

13 

3316 

13 

20 

32 

15 

13 

32 

31711 

21 

1675—13 

14 

3317 

14 

21 

33 

16 

14 

33 

3171in 

22 

1675—14 

15 

3318 

15 

'>2 

34 

17 

15 

34 

317111 

23 

167.5—15 

16 

3319 

16 

23 

35 

18 

16 

35 

31710 

24 

1075—16 

17 

3320 

17 

24 

36 

19 

17 

36 

3171p 

25 

1675—17 

18 

3321 

18 

25 

37 

20 

18 

37 

3171q 

26 

1675—18 

19 

3322 

19 

26 

38 

21 

19 

38 

3171r 

27 

1675—19 

20 

3323 

20 

27 

39 

22 

20 

39 

3171s 

28 

1675—20 

21 

3324 

21 

28 

40 

23 

21 

40 

3171t 

29 

1675—21 

22 

3325 

22 

29 

41 

24 

22 

41 

3171U 

30 

1675—22 

23 

3326 

23 

30 

42 

25 

23 

42 

3171V 

31 

1675—23 

24 

3327 

24 

31 

43 

26 

24 

50 

3171W 

32 

1675—53 

25 

3328 

25 

32 

44 

27 

25 

51 

3171X 

33 

1675—51 

26 

3329 

26 

33 

45 

28 

26 

52 

3171y 

34 

1675—52 

27 

3330 

27 

34 

46 

29 

27 

53 

3171Z 

35 

1675—53 

28 

3331 

28 

35 

47 

30 

28 

54 

3172 

36 

1675—54 

29 

3332 

29 

36 

48 

31 

29 

55 

3172a 

37 

1675 — 55 

30 

3333 

30 

37 

49 

32 

30 

60 

3172b 

38 

1676 

31 

3334 

31 

38 

50 

33 

31 

61 

3172c 

39 

1676—1 

32 

3335 

32 

39 

51 

34 

32 

62 

3172(i 

40 

1670—2 

33 

3336 

33 

40 

52 

35 

33 

m 

3172e 

41 

107&— 3 

34 

3337 

34 

41 

53 

36 

34 

64 

3172f 

42 

1676—4 

35 

3338 

35 

42 

54 

37 

35 

65 

3172g 

43 

1676—5 

36 

3339 

36 

43 

55 

38 

36 

66 

3172h 

44 

1676—6 

37 

3340 

37 

44 

56 

39 

37 

67 

31721 

45 

1676—7 

38 

3341 

38 

45 

57 

40 

38 

68 

3172J 

46 

1676—8 

39 

3342 

39 

46 

58 

41 

39 

69 

3172k 

47 

1676—9 

40 

.3343 

40 

47 

59 

42 

40 

70 

31721 

48 

1676—10 

41 

3344 

41 

48 

60 

43 

41 

71 

3172m 

49 

1676—11 

42 

3345 

'12 

49 

61 

44 

42 

72 

8172n 

50 

1676—12 

43 

3346 

43 

50 

62 

45 

43 

73 

3172o 

51 

1676—13 

44 

3347 

44 

51 

63 

46 

44 

74 

3172p 

52 

1676—14 

45 

3348 

45 

52 

64 

47 

45 

75 

3172q 

53 

1676—15 

46 

3349 

46 

53 

65 

48 

46 

76 

3172r 

54 

1676—16 

47 

3350 

47 

54 

66 

49 

47 

77 

3172s 

55 

1676—17 

48 

3351 

48 

55 

67 

50 

48 

78 

3172t 

56 

1676—18 

49 

3352 

49 

56 

68 

51 

49 

79 

3172U 

57 

167&— 19 

50 

3353 

50 

57 

69 

52 

50 

80 

3172V 

58 

1676—20 

51 

3354 

51 

58 

70 

53 

51 

90 

3172w 

59 

1676—21 

52 

3355 

52 

59 

71 

54 

52 

91 

3172X 

00 

1076—22 

53 

3356 

53 

60 

72 

55 

53 

92 

3172y 

61 

1676—23 

54 

3357 

54 

61 

73 

56 

54 

93 

3172Z 

62 

1676—24 

55 

3358 

55 

62 

74 

57 

55 

94 

3173 

63 

1676—25 

56 

3359 

56 

63 

75 

58 

56 

95 

3173a 

64 

1676—26 

57 

3360 

57 

64 

76 

59 

57 

96 

3173b 

65 

1676—2? 

58 

3361 

58 

65 

77 

60 

58 

97 

3173e 

66 

1676—28 

59 

3362 

59 

66 

78 

61 

59 

98 

3173(1 

67 

1676—29 

60 

3363 

60 

67 

79 

62 

60 

110 

3173e 

68 

1677 

61 

3364 

61 

68 

80 

63 

61 

111 

3173f 

69 

1677—1 

62 

3365 

62 

69 

81 

64 

62 

112 

3173g 

70 

1677—2 

63 

3366 

03 

70 

82 

65 

63 

113 

3173h 

71 

1677—3 

64 

3367 

64 

71 

83 

66 

64 

114 

31731 

72 

1677—4 

65 

3368 

65 

72 

84 

67 

65 

115 

3173J 

73 

1677—5 

66 

3369 

66 

73 

85 

68 

66 

116 

3173k 

74 

1677—6 

67 

3370 

67 

74 

86 

69 

67 

117 

31731 

75 

1677—7 

68 

3371 

68 

75 

87 

70 

68 

118 

3 17;;  in 

76 

1677—8 

69 

3372 

60 

76 

88 

71 

69 

119 

3173n 

77 

1677—9 

APPENDIX. 


379 


OriBinal 
Draft 


Ariz. 


111.        Kan.       Md.      Mich.      Neb.     N.  V. 


Ohio 


S  70 

§  3373 

§  70 

§  77 

§  89 

§  72 

§  70 

§130 

§  31730 

§78 

§  1678 

71 

3374 

71 

78 

90 

73 

71 

131 

317.5P 

79 

1678—1 

72 

3375 

72 

79 

91 

74 

72 

132 

31T3q 

80 

1678—2 

73 

3376 

73 

80 

92 

75 

73 

133 

3173r 

81 

1678—3 

74 

3377 

74 

81 

93 

76 

74 

134 

3173s 

82 

1678—4 

75 

3378 

75 

82 

94 

77 

75 

135 

3173t 

8:5 

1078- 5 

76 

3379 

76 

83 

95 

78 

76 

136 

3173U 

84 

1078—6 

77 

3380 

77 

84 

96 

79 

77 

137 

3173V 

85 

1678—7 

78 

3381 

78 

85 

97 

80 

78 

138 

3173W 

86 

1678—8 

79 

3382 

79 

86 

98 

81 

79 

139 

317:;x 

87 

1678—9 

80 

3383 

80 

87 

99 

82 

80 

140 

3173.V 

88 

](i78— 10 

81 

3384 

81 

88 

100 

83 

81 

141 

3173Z 

S9 

1678-11 

82 

3385 

82 

89 

101 

84 

82 

142 

3174 

90 

1678—12 

83 

3386 

83 

90 

102 

85 

83 

143 

3174a 

91 

1678-13 

84 

3387 

84 

91 

103 

86 

84 

144 

3174b 

92 

1678—14 

85 

3388 

85 

92 

104 

87 

85 

145 

3174c 

93 

1678—15 

86 

3389 

86 

93 

105 

88 

86 

146 

3174d 

94 

1678—16 

87 

3390 

94 

106 

89 

147 

3174e 

95 

1678—17 

88 

3391 

87 

95 

107 

90 

87 

148 

3174f 

96 

1678—18 

89 

3392 

88 

96 

108 

91 

88 

160 

3174? 

97 

1678—19 

90 

3393 

89 

97 

109 

92 

89 

161 

3174J1 

98 

1678—20 

91 

3394 

90 

98 

110 

93 

90 

102 

31741 

99 

1678—21 

92 

3395 

91 

99 

111 

94 

91 

163 

3174J 

100 

1678—22 

93 

3396 

92 

100 

112 

95 

92 

164 

3174k 

101 

1678—23 

94 

3397 

93 

101 

113 

96 

93 

165 

31741 

102 

1678—24 

95 

3398 

94 

102 

114 

97 

94 

166 

3174m 

103 

1678—25 

96 

3399 

95 

103 

115 

98 

95 

167 

3174U 

104 

107S— 2<> 

97 

3400 

96 

104 

116 

99 

96 

168 

31740 

105 

1678—27 

98 

3401 

97 

105 

117 

100 

97 

169 

3174p 

106 

1678—28 

99 

3402 

98 

106 

118 

101 

98 

170 

3174q 

107 

1678—29 

100 

3403 

99 

107 

119 

102 

99 

171 

31741- 

108 

1678—30 

101 

3404 

100 

108 

120 

103 

100 

172 

3174s 

109 

1678—31 

102 

3405 

101 

109 

121 

104 

101 

173 

3174t 

110 

1678—32 

103 

3406 

102 

110 

122 

105 

102 

174 

3174U 

111 

1678—33 

104 

3407 

103 

111 

123 

106 

103 

175 

3174V 

112 

1678—34 

105 

3408 

104 

112 

124 

107 

104 

176 

3174W 

113 

1678—35 

106 

3409 

105 

113 

125 

108 

105 

177 

3174X 

114 

1678—36 

107 

3410 

106 

114 

126 

109 

106 

178 

3174y 

115 

1678—37 

108 

3411 

107 

115 

127 

110 

107 

179 

3174Z 

116 

1678—38 

109 

3412 

108 

116 

128 

111 

108 

180 

3175 

177 

1678—39 

110 

3413 

109 

117 

129 

112 

109 

181 

3175a 

118 

1678—40 

111 

3414 

110 

118 

130 

113 

110 

182 

3175b 

119 

1678—41 

112 

3415 

111 

119 

131 

114 

111 

183 

3175c 

120 

1678—42 

113 

3416 

112 

120 

132 

115 

112 

183 

3175c 

121 

1678—42 

114 

3417 

113 

121 

133 

116 

113 

185 

3175e 

122 

1678-^4 

115 

3418 

114 

122 

134 

117 

114 

186 

317.5f 

123 

1678—45 

116 

3419 

115 

123 

135 

118 

115 

187 

3175g 

124 

1678—46 

117 

3420 

116 

124 

136 

119 

116 

188 

3175h 

125 

1678--t7 

118 

3421 

117 

125- 

137 

120 

117 

189 

31751 

126 

1678—48 

119 

3422 

118 

126 

138 

121 

118 

200 

3174J 

127 

1679 

120 

3423 

119 

127 

139 

122 

119 

201 

3175k 

128 

1679—1 

121 

3424 

120 

128 

140 

123 

120 

202 

31751 

129 

1679—2 

JOO 

3425 

121 

129 

141 

124 

121 

203 

3175m 

130 

1679—3 

123 

3426 

l'>2 

130 

142 

125 

122 

204 

3175n 

131 

1670 — 4 

124 

3427 

123 

131 

143 

126 

123 

205 

3175o 

1.32 

1679-5 

125 

3428 

124 

132 

144 

127 

124 

206 

3175p 

1.33 

1679—6 

126 

3429 

125 

133 

145 

128 

125 

210 

3175q 

134 

1680 

127 

3430 

126 

134 

146 

129 

126 

211 

31751- 

135 

16S0-A 

128 

3431 

127 

135 

147 

1.30 

127 

212 

3175s 

136 

16S0-B' 

129 

3432 

128 

136 

14S 

131 

128 

213 

3175t 

1.37 

16S0-C  ' 

130 

8433 

129 

137 

149 

132 

120 

214 

3175U 

138 

lt^s()-D 

131 

3434 

130 

138 

150 

1.33 

130 

215 

3175V 

1.39 

16.S0-F3 

132 

34.35 

131 

139 

151 

134 

131 

220 

3175W 

140 

16S0-F 

133 

3436 

132 

140 

152 

1.35 

1.32 

221 

3175X 

141 

lO'^orr 

134 

3437 

133 

141 

153 

136 

133 

222 

3175V 

142 

lOsii-lI 

135 

3438 

134 

142 

154 

137 

134 

003 

ai75z 

143 

16S0-I 

136 

3439 

135 

143 

155 

138 

135 

224 

3176 

144 

ir,so-.T 

137 

3440 

136 

144 

156 

139 

136 

224 

3176.1 

145 

16SO-K 

138 

3441 

137 

145 

1.57 

140 

137 

225 

3176h 

146 

1680-L 

380 


NEGOTIABLE  INSTRUMENTS  LAW. 


Original 
Draft        Ariz 


Kan.       Md. 


Neb.     N.  Y 


Ohio 


§  139 

§  3442 

§138 

§146 

§158 

§141 

§138 

§226 

140 

3443 

139 

147 

159 

142 

139 

227 

141 

3444 

140 

148 

100 

143 

140 

228 

142 

3445 

141 

149 

101 

144 

141 

229 

143 

3446 

142 

150 

162 

145 

142 

240 

144 

3447 

143 

151 

163 

146 

143 

241 

145 

3448 

144 

152 

164 

147 

144 

242 

146 

3449 

145 

153 

165 

148 

145 

243 

147 

3450 

146 

154 

166 

149 

146 

244 

148 

3451 

147 

155 

167 

150 

147 

245 

149 

3452 

148 

156 

168 

151 

148 

246 

150 

3453 

149 

157 

169 

152 

149 

247 

151 

3454 

150 

158 

170 

153 

150 

248 

152 

3455 

151 

159 

171 

154 

151 

260 

153 

3456 

152 

160 

172 

155 

152 

261 

154 

3457 

153 

161 

173 

156 

153 

262 

155 

3458 

154 

162 

174 

157 

154 

263 

156 

3459 

155 

163 

175 

158 

155 

264 

157 

3460 

156 

164 

176 

159 

156 

2<35 

158 

3461 

157 

165 

177 

160 

157 

266 

159 

3462 

158 

166 

173 

161 

158 

267 

160 

3463 

159 

167 

179 

162 

159 

268 

161 

3464 

160 

168 

180 

163 

100 

280 

162 

3465 

161 

169 

181 

164 

161 

281 

163 

3466 

162 

170 

182 

165 

162 

282 

164 

3407 

163 

171 

183 

166 

163 

283 

165 

3408 

164 

172 

184 

167 

164 

284 

166 

3469 

165 

173 

185 

168 

165 

285 

167 

3470 

166 

174 

186 

169 

166 

286 

168 

3471 

167 

175 

187 

170 

167 

287 

169 

3472 

168 

176 

188 

171 

168 

288 

170 

3473 

169 

177 

189 

172 

169 

289 

171 

3474 

170 

178 

190 

173 

170 

300 

172 

3475 

171 

179 

191 

174 

171 

301 

173 

3476 

172 

180 

192 

175 

172 

302 

174 

3477 

173 

181 

193 

176 

173 

303 

175 

3478 

174 

182 

194 

177 

174 

304 

176 

3479 

175 

183 

195 

178 

175 

305 

177 

3480 

176 

184 

196 

179 

176 

306 

178 

348  L 

177 

185 

197 

ISO 

177 

310 

179 

3482 

178 

186 

196 

181 

178 

311 

180 

3483 

179 

187 

199 

182 

179 

312 

181 

3484 

180 

188 

200 

183 

180 

313 

182 

3485 

181 

ISO 

201 

184 

181 

314 

183 

3486 

182 

190 

202 

185 

182 

315 

184 

3487 

183 

191 

203 

186 

183 

320 

185 

3487 

184 

192 

204 

187 

184 

321 

186 

3487 

185 

193 

205 

188 

185 

322 

187 

3487 

186 

194 

206 

189 

186 

323 

188 

3487 

187 

195 

207 

190 

187 

324 

189 

3487 

188 

196 

208 

191 

188 

325 

190 

189 

1 

13 

1 

1 

191 

3487 

190 

2 

14 

9 

189 

o 

192 

3488 

191 

3 

15 

2 

190 

3 

193 

3489 

192 

4 

16 

2 

101 

4 

194 

3490 

193 

5 

17 

2 

192 

5 

195 

194 

6 

18 

2 

193 

6 

196 

3491 

195 

7 

19 

2 

194 

7 

3176c 

3176d 

3176e 

3176f 

3176g 

317611 

31761 

3176J 

3176k 

31701 

3176m 

3176n 

31760 

3176p 

8176q 

3176r 

3176s 

3176t 

3176u 

3176V 

3176  .v 

3176X 

3176y 

3176Z 

3177 

3177a 

3177b 

3177c 

3177d 

S177e 

3177f 

3177^ 

317711 

31771 

3177J 

3177k 

31771 

3177m 

3177n 

31770 

3177p 

3177q 

3177r 

3177s 

3177t 

3177U 

3177V 

3177W 

3177X 

3177y 

3177Z 

3178 

3178a 

3178b 

3178c 

3178(1 

3178e 


§147 
148 
149 
150 
151 
152 
153 
154 
155 
156 
157 
158 
159 
160 
161 
162 
163 
164 
165 
166 
167 
168 
169 
170 
171 
172 
173 
174 
175 
176 
177 
178 
179 
180 
181 
182 
183 
184 
185 
186 
187 
188 
189 
190 
:191 
192 
193 
194 
195 
196 
197 
1 
2 

3 
4 


1680-M 

1680- N' 

1680-Ot 

1680-P< 

1681 

1681—1 

1681—2 

1681—3 

1681—4 

1681—5 

1681- 6 

1681-7 

1681—8 

1681—9 

1631-10 

1081—11 

1681—12 

1681—13 

1681—14 

1681—15 

16S1— 16 

16S1— 17 

1631—18 

1681—19 

1681—20 

1681—21 

16S1— 22 

1681—23 

1681—24 

7681—25 

1681—26 

1681-27 

1681—28 

l&Sl— 29 

1081—30 

1681—31 

1681—32 

1681-33 

1681-34 

1681—35 

1681—36 

1681—37 

1681—38 

1681-39 

1681—40 

1684 

1684—1 

1684—2 

1684—3 

1684—4 

lO'il— 5 

1675 

1675 

1675 

1675 

1675 

1675 

1675 


APPENDIX.  C 


WHERE  THE  VARIOUS  LAAVS  ARE  FOUND  AND  WHEN 
THEY  TAKE  EFFECT. 

Alabama, — Code  of  1907,  page  1063.    In  effect  January  1,  1908. 
Arizona,— R.  S.  1901,  Title  XLIX.    In  effect  September  1,  1901. 
Colorado,— Laws  of  1897,  ch.  64.    Approved  April  20th,  1897. 
Connecticut, — Laws  of  1897,  ch.  74.    Approved  April  5,  1897. 
District  of  Columbia,— Laws  of  1899   (U.  S.  Stats.)   ch.  47.     lu 

effect  April  3,  1899. 
Florida,— Laws  of  1897,  ch.  4524.    Approved  June  1,  1897. 
Hawaii,— Laws  of  1907,  Act  89.    In  effect  April  20,  1907. 
Idaho,— Laws  of  1903,  page  380.    In  effect  March  10,  1903. 
Illinois, — Laws  of  1907,  page  403.    Approved  June  5,  1907. 
Iowa,— Laws  1902,  ch.  130.     Approved  April  12,  1902. 
Kansas, — Laws  of  1905,  ch.  310.    In  effect  June  8,  1905. 
Kentucky,— Acts  1904,  ch.  102.    Approved  March  24,  1904. 
Louisiana, — Laws  of  1904,  Act  64.    Approved  June  29,  1904. 
Maryland,— Laws  of  1898,  ch.  119.    Approved  March  29,  1898. 
Massachusetts, — Laws  of  1898,  ch.  533.    In  effect  January  1,  1899. 
Massachusetts,—  Laws  of  1899,  ch.  130.    In  effect  March  6,  1899. 
Michigan, — Public  Acts  1905,  page  389.    Approved  June  16,  1905. 
Missouri, — Laws  of  1905,  page  243.    Approved  April  10,  1905. 
Montana,— Laws  of  1903,  ch.  121.    In  effect  March  7,  1903. 
Nebraska,— Laws  of  1905,  ch.  83.    In  effect  August  1,  1905. 
Nevada,— Laws  of  1907,  ch.  62.    In  effect  May  1,  1907. 
New  Hampshire, — Laws  of  1909,  ch.  123.     Approved  January  1, 

1910. 
New  Jersey, — Laws  of  1902,  ch.  184.    Approved  April  4,  1902. 
New  Mexico,— Laws  of  1907,  ch.  83.    Approved  March  21,  1907. 

381 


382  NEGOTIABLE  INSTRUMENTS  LAW. 

New  York,— Laws  of  1897,  ch.  612.    Became  a  law  May  19,  1897. 
New  York,— Laws  of  1898,  ch.  336.    Became  a  law  April  20,  1898. 
North  Carolina,— Laws  of  1899,  ch.  733.    In  effect  March  8,  1899 
North  Dakota,— Laws  of  1899,  ch.  113.    Approved  March  7,  1899. 
Oklahoma,— Laws  of  1909,  ch.  24.    Approved  March  20,  1909. 
Ohio, — Laws  of  1902,  page  162.    In  effect  January  1,  1903. 
Oregon, — Laws  of  1899,  page  18.    Approved  February  16,  1899. 
Pennsylvania, — Laws  of  1901,  page  194.    In  effect  September  2, 

1901. 
Ehode  Island,— Laws  of  1899,  ch.  674.    In  effect  July  1,  1899. 
Tennessee,— Laws  of  1899,  ch.  94.    In  effect  May  16,  1899. 
Utah,— Laws  of  1899,  ch.  83.    In  effect  July  1,  1899. 
Virginia,— Laws  of  1897-8,  ch.  866.    Approved  March  3,  1898. 
Washington,— Laws  of  1899,  ch.  149.    In  effect  March  22,  1899. 
West  Virginia,- Acts  of  1907,  ch.  81.    In  effect  January  1,  1908. 
Wisconsin,— Laws  of  1899,  ch.  356.    In  effect  May  15,  1899. 
Wyoming, — Laws  of  1905,  ch.  43.    In  effect  February  15,  1905. 


APPENDIX  D. 


Schedule  of  Statutes  Repealed  by  the 
Various  Negotiable  Instru- 
ments Laws. 

ALABAMA,  statute  contains  no  statement  of  express  repeals. 

ARIZONA,  statute  contains  no  statement  of  express  repeals. 

COLORADO,  Laws  1897,  c.  64,  repeals  (§  197)  sections  101  to  115 
inclusive,  and  sections  1630,  2463,  2464  and  2465  of  the  General 
Statutes  of  1883,  and  all  other  inconsistent  acts  or  parts  of  acts. 

CONNECTICUT,  Laws  1897,  c.  LXXIV,  repeals  (§  197)  sections 
1858,  1859,  1860  and  1863  of  the  General  Statutes. 

DISTRICT  OF  COLUMBIA,  U.  S.  Statutes  at  Large  1897-99,  e. 
47,  repeals  (§  190)  all  inconsistent  laws. 

FLORIDA,  Laws  1897,  c.  4524,  No.  10,  repeals  (§  190)  aU  con- 
flicting laws  or  parts  of  laws. 

IDA.HO,  section  197  repeals  of  the  laws  enumerated  in  the 
schedules  thereto  annexed  that  portion  specified  in  the  last 
column  (schedule  is  omitted  in  the  laws  as  published). 

ILLINOIS,  section  196  repeals  section  1268  of  an  act  entitled  "An 
Act  to  Revise  the  Laws  in  Relation  to  Promissory  Notes,  Bonds, 
Due  Bills,  and  other  Instruments  in  "Writing."  Approved 
March  18,  1874.  In  force  July  1st,  1874,  and  sections  10  and 
11  of  an  act  entitled  "An  Act  to  Provide  for  the  Appointment, 
Qualification  and  Duties  of  Notary  Publics  and  Certifying  their 
Official  Acts."    Approved  April  5,  1872.    In  force  July  1,  1872. 

IOWA,  section  197  repeals  the  following  enumerated  sections  of 
Title  15,  Chapter  3  of  the  Code ;  sections  3043,  3045,  3049,  3050, 
3051,  3052,  3054  and  3055. 

383 


384  NEGOTIABLE  INSTRUMENTS  LAW. 

KANSAS,    section   199   repeals   sections   540-557 A   of   Dassler's 
General  Statutes  of  1901,  and  all  acts  and  parts  of  acts  in  con- 
flict herewith. 
KENTUCKY,  section  195  repeals  all  laws  inconsistent  with  the  act. 

LOUISIANA,  statute  contains  no  express  repeal. 

MARYLAND,  Laws  1898,  c.  119.    No  express  repeals. 

MASSACHUSETTS,    Acts   and   Resolves    1898,    c.    533,    repeals 
(§  197)  all  inconsistent  acts  and  parts  of  acts. 

MICHIGAN,  section  192  repeals  all  acts  and  parts  of  acts  in- 
consistent with  the  foregoing  provisions  of  the  act. 

MISSOURI,  section  197  repeals  all  acts  and  parts  of  acts  incon- 
sistent herewith. 

MONTANA,  section  197  repeals  all  acts  and  parts  of  acts  in  con- 
flict herewith. 

NEBRASKA,  section  197  repeals  the  original  chapter  of  the  Com- 
piled Statutes  of  Nebraska  for  1903. 

NEVADA,  section  197  repeals  all  acts  or  parts  of  acts  inconsistent 
with  or  repugnant  to  the  provisions  of  the  act. 

NEW  HAMPSHIRE,  section  196  repeals  all  acts  and  parts  of  acts 
inconsistent  with  the  act. 

NEW  JERSEY,  section  197  repeals  of  the  laws  enumerated  in  the 
schedules  thereto  annexed  that  portion  specified  in  the  last 
column  (schedule  is  omitted  in  the  laws  as  published). 

NEW  MEXICO,  section  197  repeals  all  acts  and  parts  of  acts  in 
conflict  herewith  and  all  acts  relative  to  negotiable  instruments. 

NEW  YORK,  Laws  1897,  c.  612  (Amendments,  Laws  1898,  c.  361), 
repeals  (Schedule  following  section  341)  : 

R.  S.,  pt.  II.,  Ch.  4,  tit.  II  AH      Bills  and  notes. 

Laws    1835     141  All      Notice  of  protest;  how  given. 

1857     416  All      Commercial  paper. 

1865     309  All      Protest  of  foreign  bills,  etc. 

1870     438  All      Negotiability    of    corporate    bonds; 

how  limited. 

1871      84  All      Negotiable  bonds;  how  made  non- 

negotiable. 

1873     595  All      Negotiable    bonds;    how    made    ne- 

gotiable. 

1877     65  1,3.      Negotiable    instruments    given    for 

patent  rights. 


APPENDIX.  385 

1887     461  All      Effect    of   holidays   upon    payment 

of  commercial  paper. 

1888     229  All      One  hundredth  anniversary  of  the 

inauguration  of  George  Washing- 
ton. 

1891      262  1.         Negotiable  instruments  given  on  a 

speculative    censideration. 

1894     607  All      Days  of  grace  abolished. 

NORTH  CAROLINA,  Pub.  Laws  1899,  c.  733,  repeals  (§  197)  all 
laws  and  parts  of  laws  in  conflict  with  the  provisions  of  this 
act.  The  same  section  also  provides:  "That  nothing  in  this  act 
shall  authorize  the  enforcement  of  an  authorization  to  confes? 
judgment  or  a  waiver  of  homestead  and  personal  property 
exemptions  or  a  provision  to  pay  counsel  fees  for  collection 
incorporated  in  any  of  the  instruments  mentioned  in  this  act; 
but  the  mention  of  such  provisions  in  such  instrument  shall  not 
affect  the  other  terms  of  such  instruments  or  the  negotiability 
thereof,  the  laws  now  in  force  with  regard  to  days  of  grace  shall 
remain  in  force  and  shall  not  be  repealed  by  this  act." 

NORTH  DAKOTA,  Laws  1899,  c.  113.    No  express  repeals. 

OHIO,  section  3178  c,  subdivision  2,  repeals  the  original  sections 
3171,  3172,  3173,  and  3174,  and  original  sections  3175,  3176,  and 
3177,  as  amended  March  12,  1896  (92  Ohio  Laws  61-62),  and 
original  section  3178  of  the  Revised  Statutes  of  Ohio. 

OKLAHOMA,  section  190  repeals  all  acts  and  parts  of  acts  in 
conflict  herewith. 

OREGON,  Laws  1899,  p.  18,  repeals  (§  193)  all  inconsistent  acts  or 
parts  of  acts. 

PENNSYLVANIA,  section  197  repeals  all  acts  and  parts  of  acts 
inconsistent  herewith. 

RHODE  ISLAND,  Laws  1899,  c.  623,  p.  24,  repeals  (§  8)  sections  4, 
5,  7  and  9  of  Chapter  166  of  the  General  Laws. 

TENNESSEE,  Laws  1899,  c.  94.    No  express  repeals. 

UTAH,  Laws  1899,  c.  83,  repeals  (§  197)  title  46  Revised  Statutes 
1898,  being  sections  1553  to  1665  inclusive,  and  all  other  con- 
flicting acts. 

yiRGINIA,  Acts  Assem.  1897-98,  c.  866,  repeals  (§  197)  all  con- 
flicting acts  and  parts  of  acts.    This  section  also  provides  that 

Opp. — Sel. — 25 


386  NEGOTIABLE  INSTRUMENTS  LAW. 

"Of  the  laws  enumerated  in  the  schedules  hereto  annexed,  that 
portion  specified  in  the  last  column  is  repealed,"  but  no  schedule 
is  annexed  and  the  act  is  defective  in  this  respect. 

WASHINGTON,  Laws  1899,  c.  CXLIX,  repeals  (§  197)  all  incon- 
sistent acts  and  parts  of  acts. 

WEST  VIRGINIA,  in  section  197  it  is  provided  that  section  9  of 
Chapter  99  of  the  Code  of  West  Virginia  and  all  acts  and  parts 
of  acts  in  conflict  herewith  are  hereby,  to  that  extent,  repealed. 

WISCONSIN,  Laws  1899,  c.  356,  repeals  (2  immediately  following 
section  1684-6)  all  inconsistent  acts. 

This  section  also  repeals  sections  176,  1675,  1677,  1678,  1679, 
1680,  1681,  1682,  1683,  1684,  of  the  Revised  Statutes  of  1878. 
Sections  1676,  1944,  1945,  4143,  4194,  4425,  and  4458,  are  not 
affected  by  the  act,  being  expressly  saved  from  repeal.  Sections 
1944  and  1945  just  referred  to  are  considered  on  pages  44  and 
239  of  this  work,  and  sections  1676,  4194  and  4425  are  con- 
sidered on  page  47  of  this  work. 

Section  "4133"  as  it  is  printed  in  the  act  is  probably  a  mis- 
take, the  section  meant  being  4193  which  provides:  "In  all 
actions  brought  on  promissory  notes,  or  bills  of  exchange,  by 
the  indorsee,  the  possession  of  the  note  shall  be  presumptive 
evidence  that  the  same  was  indorsed  by  the  persons  by  whom 
it  purports  to  be  indorsed." 

Section  4458  provides  that  "Any  person  who  shall  fraudulent- 
ly affix  to  any  instrument  or  writing  purporting  to  be  a  note, 
draft,  or  other  evidence  of  debt  issued  by  any  corporation,  a 
fictitious  or  pretended  signature,  purporting  to  be  the  r:ignature 
of  an  officer  or  agent  of  such  corporation,  with  intent  to  pass 
the  same  as  true,  it  shall  be  deemed  a  forgery,  though  no  such 
person  may  ever  have  been  an  officer  or  agent  of  such  corpora- 
tion, nor  such  corporation  ever  have  existed. ' ' 

WYOMING,  section  197  repeals  all  acts  and  parts  of  acts  in  con- 
flict with  the  provisions  of  this  act. 


TABLE  OF  CASES. 


References  are  to  Pages. 


A. 


A.  B.  Farquhar  Co.  v.  Higham,  196, 

199,  206. 
Aborn  v.  Bosworth,  13. 
Abramowitz    v.    Abramowitz,    204. 
Acme  Food  Co.  v.   Older,   100. 
Adair  v.    Egland,  315. 
Adam  v.  Manufacturers'  &  Traders' 

Nat.  Bank,  148,  192. 
Adams  v.  Addington,  60. 

V.    Kennedy,    102. 

V.   Leavens,    159. 

V.  Leland,  262,  264. 

V.  Seaman,  60. 

V.  Wright,  272,  297. 
Adler    v.    Levinson,    283. 
Adoue  V.    Fox,   151. 
Aebi    V.    Bank    of    Evansville,    222, 

255,  265,  340. 
Aetna   Nat.   Bank   v.    Charter   Oak 
Life   Ins.   Co.,  102,   105. 

V.  Winchester,  315. 
Aiken  v.   Marine  Bank,  181. 
Akin  V.  Jones,  116. 
Alabama  Nat.  Bank  v.  Halsey,  233. 
Albany    County    Bank    v.    People's 

Ice  Co.,  221,  223. 
Albert  v.  Hoffman,  226. 
Albright  v.  Griffin,  71. 
Alcock  V.   McKain,  185. 
Alexander  v.  Oaks,  64. 
Alexander  &  Co.  v.  Hazelrigg,  11, 

233. 
Allen  V.  Avery,  250,  251. 

V.  Bank  of  U.  S.,  100. 


Allen  V.  Brown,  198. 

V.   Corn   Exchange  Bank,  179. 
V.  Eldred,  281. 
V.  Kramer,  257. 
V.  Suydam,  118. 
Allison  V.   Hollembeak,  4. 
Allyn  V.  Allyn,  159. 
Almich  V.  Downey,  22,  235. 
Altman  v.  Rittershofer,  60. 
Alvord    V.    Baker,    139. 
American    Bank    v.    Jenness,    216, 

320,  321. 
American   Exchange   Nat.    Bank  v. 
American    Hotel    Victoria 
Co.,  294. 
V.  N&w  York  Belting  &  Pack- 
ing Co.,  225. 
American  Immigrant  Co.  v.  Clark, 

63. 
American  Ins.  Co.  v.  Callahan,  52. 
American    Nat.    Bank  v.   American 
Wood-Paper  Co.,  42,  58. 
V.  Fountain,  229. 
V.  Junk  Bros.  Lumber  &  Mfg. 

Co.,  126,  291. 
V.  Sprague,  87. 
Amherst  Academy  v.  Cowls,  160. 
Amsinck  v.  Rogers,  13,  15,  269. 
Anderson    v.    Dundee    State    Bank, 
77. 
V.  First  Nat.  Bank,  256. 
V.  Gill,  258. 
v.  Pearce,  46. 
v.  Rodgers,  258. 
Andrew  v.  Blachly,  IS. 


387 


388 


TABLE  OF  CASES. 


References 

Andrews  v.  Bond,  180. 

V.  German  Nat.  Bank,  ISO. 

V.  Herriot,  43. 
Androscoggin  Bank  v.  Kimball,  20, 

236. 
Anglo-California  Bank  v.  Ames,  233. 
Ankeny  v.  Henry,  206. 
Apperson  v.  Bynum,  262. 
Apple   V.   Lesser,  285. 
Arbuckle  v.  Templeton,  111. 
Archer  v.  Claflin,  19,  44. 

V.  Shea,  205. 
Arkansas  Valley  Smelting  Co.  v. 

Belden  Min.   Co.,  158. 
Armour  Bros.  Banking  Co.  v.  Riley 

County   Bank,   173. 
Armstrong,  In  re,  135. 
.\rmstrong  v.  Chadwick,  304. 

V.  Lewis,  276. 

V.    Pomeroy    Nat.    Bank,    78. 

V.   Scott,    189. 

V.  Thurston,  293. 
vrnd  V.  Aylesworth,  225,  229. 

V.  Heckert,  43. 

V.  Sjoblom,  232. 
Arnold  v.  Bryant,  199. 

V.  Dresser,  249,  262,  263,  264. 

V.  Kinloch,  293. 

V.  Rock  River  Val.  R.   Co.,  87. 

V.  Sprague,  140,  149. 
Arnot's   Adm'r  v.   Symonds,   165. 
Arpin  v.  Owens,  193. 
Arthurs  v.  Hart,  234. 
Artisans'  Bank  v.  Backus,  293, 
Aukland  v.  Arnold,  224,  225. 
Aurora  v.  West,  233. 
Austell  V.  Rice,  95. 
Austin  V.  Burns,  91. 

V.  Papanti,  136. 

V.  Rodman,  118. 
Auten  V.  Gruner,  223. 
Averett's  Adm'r  v.  Booker,  S3,  93. 
Averill  v.  Loucks,  327. 


are  to  Pages. 
Avon    Springs    Sanitarium    Co.    v. 

Kellogg,  95. 
Ayer  v.  Hutchins,  216. 
Aymar  v.  Beers,  121. 
Ayrault  v.  Pacific  Bank,  270. 
Ayres  v.  Campbell,  159. 

B. 

Babcock,  In  re,  192. 
Babcock  v.  Benson,  36. 
Bachellor  v.  Priest,  121. 
Bacigalupo  v.   Parrilli,  281. 
Backus  v.  Danforth,  71,  72, 
Bacon    v.    Fitch,    82. 

v.   Hanna,  302. 

V.    Page,   66. 
Bade  v.  Feay,  18,  100. 
Baer  v.    Leppert,   247,   302. 
Bailey  v.  Dozier,  274. 

V.  Southwestern  Railroad  Bank, 
131. 
Baker  v.  Gregory,  233, 

V.  Leland,  47. 

V.   Martin,  198. 
Baldwin  v.  Daly,  337. 

V.  Freydendall,  23. 
Ballou  V.  Boland,  114. 
Ballston  Spa  Bank  v.  Marine  Bank,, 

30,  309. 
Baltimore   &   Ohio   R.   Co.   v.    First 

Nat.  Bank,  115,  131,  133,  148. 
Bank  v.  Looney,  33,  218,  221. 

V.  Neal,  236. 
Bank  of  Alexandria  v.  Swann,  293. 
Bank  of  America  v.  Waydell,   174, 
220. 

v.  Woodworth,  85. 
Bank    of    Antigo    v.    Union    Trust 

Co.,  116. 
Bank  of  Benson  v.  Jones,  Z7. 
Bank  of  Carroll  v.  Taylor,  87. 
Bank    of    Columbia    v.    Lawrence, 
301. 


TABLE   OF  CASES. 


389 


Bank  of  Columbia  v.  Patterson,  43. 
Bank    of    Cooperstown    v.    Woods, 

271,   293. 
Bank  of   Cumberland  v.   Maybcrry, 

22. 
Bank  of  England  v.  Vagliano  Bros., 

2,  79,  80. 
Bank  of  Gilby  v.   Farnsworth,  191. 
Bank  of  Guntersville  v.  Jones  Cot- 
ton Co.,  12,  239. 
Bank  of  Houston  v.  Day,  216. 
Bank  of. Jamaica  v.  Jefferson,  198. 
Bank    of    Laddonia    v.    Bright-Coy 

Commission  Co.,  8,  13. 
Bank  of  Lassen  County  v.  Sherrer, 

74. 
Bank  of  Linsborg  v.  Ober,  286. 
Bank  of  Marietta  v.  Pindall,  85. 
Bank   of    Metropolis   v.    First    Nat. 

Bank,    176. 
Bank   of    Monticello    v.    Dooly,   92, 

93. 
Bank  of   Montpelier  v.   Montpelier 

Lumber  Co.,  Ill,  196,  266,  304. 
Bank   of   Morgan    City   v.    Herwig, 

18,  102. 
Bank    of    Morganton    v.    Hay,    151, 

180. 
Bank  of  Morehead  v.   Hernig,  223, 

229,  231. 
Bank  of  Newberry  v.  Richards,  85. 
Bank    of    Old    Dominion    v.     Mc- 
Veigh,  305. 
Bank  of  Orleans  v.  Merrill,  47. 
Bank  of  Pittsburgh  v.  Neal,  14,  147, 

213. 
Bank  of  Port  Jervis  v.  Darling,  289. 
Bank  of  Red  Oak  v.  Orvis,  125,  249. 
Bank   of   Sherman    v.    Apperson    & 

Co.,  51. 
Bank   of  Sonoma  County  v.   Gove, 

241. 
Bank  of  the  State  v.  Bank  of  Cape 

Fear,  262, 


are  to  Pages. 

Bank     of     State     of     Missouri     v. 

Vaughan,  286. 
Bank  of  Syracuse  v.  Hollister,  251. 
Bank    of    United    States    v.    Davis, 
287. 

V.  Goddard,  287. 

V.  Smith,  145,  185. 
Bank  of  University  v.  Tuck,  233. 
Bank  of  Utica  v.  Bender,  302. 

v.  Smith,    251. 
Bank    of    Vergennes    v.    Cameron, 

281. 
Bank    of    Washington    v.    Pierson, 
289. 

v.  Triplett,   125. 
Bank  of  Winona  v.  Wofford,  74. 
Barbaroux  v.  Waters,  246,  284. 
Barclay  v.  Weaver,  304. 
Barden  v.  Hornthal,  4. 
Baring  v.  Clark,  330. 
Barker  v.  Bell,  9. 

V.  Parker,  259. 
Barlov^r  v.  Buckingham,  22. 

V.   Coggan,  248. 

v.  Gregory,  7. 
Barnard  v.  Gushing,  112. 
Barnett  v.  Juday,  112. 

V.  Spencer,  168. 
Barrett  v.  Dodge,  36. 
Barry  v.  Crowley,  248. 
Bartlet  v.  King,  9. 
Bartlett    v.    Robinson,   300. 

V.    Tucker,    30. 
Barton  v.  Trent,  202. 
Basche  v.  Philips,  129. 
Bass   v.   Wellesley,   328. 
Bassenhorst  v.   Wilby,  66,  265. 
Batchelder  v.  White,  315. 
Bates  v.  Boston  &  N.  Y.  Cent.  R. 

Co.,  43. 
Battemen  v.  Butcher,  99. 
Raumeister  v.  Kuntz,  196,  265,  281, 

304. 
Baxter  v.  Camp,  318. 


390 


TABLE  OF  CASES. 


References 

Bay  V.  Freazier,  72. 

Bayley  v.  Taber,  21,  23,  233. 

Beall  V.   Pearre,  99,   100. 

Beals   V.   Peck,  290. 

Beardsley  v.  Webber,  47. 

Beauregard  v.  Knowlton,  246. 

Beck  V.  Mailer,  229. 

Bedford  Bank  v.  Acoam,  326. 

Bedford    Commercial    Ins.    Co.    v. 

Covell,  33. 
Beecher  v.  Buckingham,  159. 
Beede  v.  Real  Estate  Bank,  325. 
Been  v.  Farrell,  308. 
Beer  v.  Clifton,  66. 
Belden  v.  Hann,  171. 
Belford  v.  Beatty,  109. 
Belknap  v.  National  Bank  of  North 

America,  316. 
Bell  V.  Alexander,  116. 

V.  Hagerstown  Bank,  294. 

V.  Waudby,  30,  309. 
Bellows  V.  Folsom,  37. 
Bellows     Falls     Bank    v.     Rutland 

County  Bank,  49. 
Benedict  v.   Cowden,  314. 

V.  Kress,  228. 

V.  Schmieg,  249  . 
Benjamin  v.   Rogers,  97. 

V.  Tillman,  44. 
Benn  v.  Kutzschau,  60. 
Benton  v.   Sikyta,  225. 
Berenson  v.  London  &  Lancashire 

Fire  Ins.   Co.,  48. 
Berkeley  v.  Tinsley,    104. 
Bernhard  v.  Brunner,  37. 
Bettis  V.  Bristol,  180. 

V.  Schrieber,  272. 
Bettison  v.  Jennings,  326. 
Bibb  V.   Skinner,   167. 
Bickford  v.  First  Nat.  Bank,  33. 
Biesenthall  v.  Williams,  12,  46. 
Bigelow  Co.  V.  Automatic  Gas  Pro- 
ducer Co.,  97. 
Biggerstaff  v.  Marston,  233. 


are  to  Pages. 

Biggs  V.  Piper,  22. 

Bingham  v.  Stewart,  189. 

Birch  V.  Fisher,  47. 

Bird  V.  Harville,  217. 

Birmingham  Nat.  Bank  v.  Bradley, 

205. 
Bishop  V.  Dexter,  66,  67. 
Black  V.   Enterprise  Ins.  Co.,  175. 
V.  First  Nat.  Bank,  92,  104,  180, 
220,  239. 
Black  River  Sav.  Bank  v.  Edwards, 

94. 
Blaine  v.  Bourne,  173. 
Blake  v.  Coleman,  112. 

V.    Hamilton    Dime    Sav.    Bank 
Co.,    14,    194,    195. 
Blakeslee  v.  Hewett,  173,  247,  287. 
Blakey  v.  Johnson,  314. 
Bledsoe  v.  Fisher,  168. 
Blydenburgh  v.  Thayer,  159. 
Board     of     Com'rs     Bartholomew 

County  v.  Bright,  8. 
Board  of  Education  v.  Duparquet, 

159. 
Bodley  v.  Anderson,  327. 
Boggs  v.  Branch  Bank  at  Mobile, 
273. 
V.   Wann,   101. 
Bogue  v.  Melick,  198. 
Boles  V.  Harding,  78,  190. 
Bolles  v.  Walton,  31. 
Bond  v.  Dolby,  6. 
Bookheim   v.    Alexander,   218. 
Bookstaver  v.  Jayne,  37,  99. 
Booth  v.  Powers,  308. 
Boozer  v.  Anderson,  60. 
Borden  v.  Southerland,  43. 
Borland  v.   PhilHps,  321. 
Born  v.  First  Nat.  Bank,  150. 
Boss  V.  Hewitt,  214. 
Boston  Nat.   Bank  v.  Jose,  327. 
Boston  Steel  &  Iron  Co.  v.  Steuer, 

24,  26,  27,  97,  214,  215,  237. 
Bostwick  V.  Dodge,  232. 


TABLE  OF  CASES. 


391 


References 
Boswell  V.  Citizens'  Sav.  Bank,  15, 

115. 
Bosworth      V.      Jacksonville      Nat. 

Bank,  114. 
Bothell  V.  Schweitzer,  312. 
Bowles  V.  Lambert,  46. 
Bowman  v.  First  Nat.   Bank,  173. 

V.   McChesney,   65. 

V.  St.  Louis  Times,  325. 
Boyce  v.  Edwards,  134,  152. 
Boyd  V.  Beebe,  210. 

V.   Cleveland,  277. 

V.  Johnston,  33. 

V.   McCann,   25. 
Boynton  v.  McDaniel,  224. 
Brabazon   v.   Seymour,    144. 
Bradford  v.  Cooper,  273. 

V.   Prescott,   183. 
Bradley  v.   McClellan,   193. 
Brailsford  v.  Williams,  288. 
Branch    Bank    at    Montgomery    v. 

Gaflfney,   66. 
Brandt  v.   Mickle,  304. 
Brem  v.   Covington,   131. 
Brent  v.  Washington  Bank,  289. 
Brenzer  v.   Wightman,   72. 
Brewster  v.  McCardle,  23. 

V.  Shrader,  98,  219. 
Briggs  V.  Partridge,  31. 
Brigham  v.  Potter,  94. 
Brill  V.  Tuttle,  114. 
Brill  Co.  V.   Norton   &  Tanton   St. 

R.  Co.,  103,  105. 
Brinkman  v.  Hunter,  152. 
Bristol  V.  Warner,  70,  93,  94. 
Britt  V.  Lawson,  249. 
Britton  v.  Dierker,  315. 
Brook  V.  Teague,  223.  • 

V.  Vannest,  175. 
Brookheim  v.  Alexander,  234. 
Brooks  v.  Higby,  262,  271. 

V.  Sullivan,  98,  220. 
Brotherton  v.  Street,  176. 
Brewer  v.  Wooten,  286. 


are  to  Pages. 

Brown  v.  Ames,  205. 

v.  Butchers'  &  Drovers'  Bank, 
18,  29,  168. 

V.  Donnell,  206. 

V.   Ferguson,   13. 

V.  Oilman,  46,  82. 

v.  Jones,  293. 

V.  Jordahl,  42,  44. 

V.    Leckie,    149. 

V.  Lusk,  15. 

V.  Montgomery,  203. 

V.  Nichols,  335. 

V.  Parker,  31. 

V.  Reed,  314. 

v.    Richardson,  64. 
Brownlee  v.  Arnold,  113. 

V.  Madison  County  Com'rs,  53. 
Bruck  V.  Lambeck,  204. 
Brunswick-Balke-Collender    Co.    v. 

Boutell,  33. 
Brunswick  Bank  v.  Sewall,  321. 
Brush  V.  Reeves'  Adm'rs,  197. 
Bryant  v.  La  Banque,  34. 

v.  Merchants'  Bank,  305. 
Buchanan  v.  Wren,  52. 
Buck  V.  Davenport  Sav.  Bank,  168. 
Bucklen  v.  Johnson,  166. 
Buckner  v.  Finley,  13. 
Bull  V.  Bank  of  Kasson,  63. 

v.  First  Nat.  Bank,  257. 

V.    Sims,    53. 
Bullard  v.  Randall,  131. 
Bullock  V.  Taylor,  60. 
Bumont  v.  Pope,  118. 
Burbank  v.   Beach,  286, 
Burch  V.  Daniel,  313. 
Burgess  v.  Chapin,  203. 
Burgettstown    Nat.    Bank    v.    Nil!, 

276,  277. 
Burke  v.  Dulaney,  36. 

V.  Utah  Nat.  Bank,  151. 
Burkhalter    v.    Second    Nat.    Bank, 
327. 


392 


TABLE  OF  CASES. 


References  are  to  Pages. 


Burnham  v.  Allen,  108. 

V.  Merchants'  Exch.  Bank,  228. 

V.  Webster,  287. 
Burnheisel  v.   Field,   110. 
Burrus  v.  Life  Ins.  Co.,  122. 
Burson  v.   Huntington,  36. 
Butler  V.  Cams,  160,  308. 

V.   Paine,  63. 
Buzzell  V.  Tobin,  234,  238. 
Byar's  Garnishees  v.  Griffin,  158. 
Byers  v.  Tritch,  198,  317. 
Byington  v.  Simpson,  95. 
Bynum  v.  Apperson,  262,  278. 
Byrd  v.  Bertrand,  139. 


Cady  V.  Bradshaw,  265. 

Cahall     V.     Citizens'     Mut.     Bldg. 

Ass'n,  9. 
California   Bank  v.   Sayre,  309. 
Callahan  v.  Bank  of  Kentucky,  126, 

291. 
Callanan  v.  Edwards,  159. 
Calvert  v.  Dimon,  227. 
Cambell  P.  P.  &  M.  Co.  v.  Jones, 

108. 
Camden  Nat.  Bank  v.  Fries-Breslin 

Co.,  99. 
Camp  V.  Carpenter,  160,  308. 

V.  Knox  Co.,  54. 
Campbell  v.  Brown,  240. 
V.  McCormac,  94. 
V.  Pettengill,  144. 
Canadian  Bank  of  Commerce  v. 
Coumibe,  192. 
V.  McCrea,  46. 
Canajoharie  Nat.  Bank  v.  Diefen- 

dorf,  216,  225,  228. 
Canfield  v.  Mcllwaine,  183. 
Capital  City  Ins.  Co.  v.  Quinn,  191. 
Capital    City    State    Bank    v.    Des 

Moines    Cotton-Mill   Co.,    102. 
Carmody  v.  Crane,  62. 


Carnhan  v.  Pell,  48. 
Carnwright  v.   Gray,  70,  93,  94. 
Carothers  v.  Richards,  233. 
Carpenter  v.  Farnsworth,  75. 
Carr    v.    National    Security    Bank, 

116. 
Carrington  v.  Waff,  113. 
Carrol  v.  Peters,  94. 
Carroll  v.  Sweet,  258. 
Carruth  v.  Walker,  71,  72. 
Carson's    Adm'rs    v.    Russell,    122, 

128. 
Casco  Nat.  Bank  v.  Clark,  33. 

V.  Shaw,  295. 
Cason  V.   Heath,  325. 
Cassell  V.  Regierer,  IS,  283,  302. 
Catlin  V.  Jones,   171. 
Cauthen  v.   Central   Georgia  Bank, 

208. 
Cayuga    County   Bank   v.    Bennett, 
289. 
V.  Hunt,  248,  250. 
V.    Warden,   293. 
Cayuga     County      Nat.     Bank     v. 

Purdy,  11,  60. 
Cecil  Bank  v.  Heald,  97. 
Cedar    Falls    Co.    v.    Wallace    Bro- 
thers, 265. 
Cellers  v.  Meachem,  2,  3,  336. 
Central  Bank  v.  Allen,  262. 
V.  Davis,  305. 
V.  St.  John,  272. 
Central    Nat.    Bank    v.    Copp,    309, 
327. 

V.    Spratlen,    114. 
Central     Railroad     v.     First     Nat. 

Bank   of   Lynchburg,    176. 
Chaddock  v.  Vanness,  196. 
Chalmers  v.  McMurdo,  209. 
Chamberlain  v.  Young,  83. 
Chambers  v.   Falkner,  229. 
Champion     Empire     Min.     Co.     V. 

Bird,  229. 
Chandler  v.  Kennedy,  61. 


TABLE  OF  CASES. 


393 


References 

Chanoine  v.   Fowler,  286. 
Chapman  v.    Rose,  224. 
Chappell  V.   Spencer,  316. 
Chariton    Plow    Co.    v.    Davidson, 

214,  237. 
Charles  v.   Denis,   172. 
Charless  v.   Lamberson,  6. 
Charlton  v.  Reed,  53,  71, 
Chase  v.  Behrman,  56. 
V.    Kellogg,    56. 
V.  Senn,  52,  56. 
Chase  Nat.  Bank  v.  Faurot,  42,  43, 

232. 
Chatham  Bank  v.  Allison,  274. 
Chautauqua  County  Bank  v.  Davis, 

185. 
Cheek  v.  Roper,  125. 
Cheever  v.  Pittsburg,  S.  &  L.  E.  R. 

Co.,  241. 
Chemical    Nat.    Bank    v.    Kellogg, 

2,  184,  225,  232. 
Chicago,  C.  &  L.  R.   Co.  v.  West, 

283. 
Chicago  R.  Equipment  Co.  v.  Mer- 
chants' Bank,  57,  70,  88. 
Chickering   v.    Greenleaf,    51. 
Child    v.    Eureka    Powder    Works, 
192. 
V.  Moore,  278. 
Childress  v.   Emory,  179. 

v.  Stuart,  63. 
Chipman  v.  Foster,  34. 
Chipmant  v.  Tucker,  35. 
Chisholm  v.  Williams,  327. 
Chism  V.  First  Nat.  Bank,  78. 
Chistmas  v.  Russell,  114. 
Choate  V.  Stevens,  88. 
Chrisman's  Adm'x   v.  Harman,  320, 

321. 
Christian    County    Bank   v.    Goode, 

59,  171. 
Christy  v.  Ogle,  100. 
Chrysler  v.  Renois,  63. 


are  to  Pages. 
Church  V.  Clark,  251. 

V.  Howard,  316. 

V.  Stevens,  19,  42. 
Cisne  v.  Chidester,  57,  109. 
Citizens'  Bank  v.   First  Nat.  Bank, 

257,  258,  259,  263,  297. 
Citizens'    Nat.    Bank   v.    Lilienthal, 
104,  221. 

V.  Richmond,  313. 
Citizens'   Sav.   Bank  v.   Hays,  290. 
Citizens'  State  Bank  v.  Adams,  308. 

V.  Cowles,  221. 
City  of  Carlyle  v.  Carlyle  W.,  L.  & 

P.  Co.,  160. 
City  of  Seattle  v.  Liberman,  114. 
City  Bank  v.  Taylor,  323. 
City  Deposit  Bank  v.  Green,  96,  99, 

229. 
City  Nat.  Bank  v.  Clinton  County 
Nat.   Bank,  291. 

V.  Jordan,  229. 
City  Sav.  Bank  v.  Hopson,  265. 
Claflin  V.  Boorum,  239. 

V.   Wilson,    173,   176,   181. 
Clapp  V.  Rice,  208. 
Clark  V.  Eldridge,  293. 

V.   Farrington,  206. 

V.  Pease,  233. 

V.   Sigourney,    167. 
Clarke  v.  Johnson,  238. 
Clay  City  Nat.  Bank  v.  Halsey,  103. 
Clegg  V.  Lemessurier,  43. 
Clifton  V.  Bank  of  Aberdeen,  60. 
Cline  V.  Guthrie,  238. 
Closson  V.  Stearns,  18,  168. 
Clough  V.  Holden,  250. 
Clower  V.  Wynn,  26. 
Glutton   V.   Attenborough,   79. 
Cocke  V.  Bank  of  Tennessee,  290. 
Coddington  v.   Bay,  97. 
Coffin   v.   Grand   Rapids   Hydraulic 

Co.,  113. 
Coflfman  v.  CampLell,  144,  152. 
Coghlin  V.  May,  104. 


39^ 


TABLE  OF  CASES. 


References 

Cole  V.  Dalton,  12. 
V.  Jessup,  246,  247. 
V.  Tuck,  167. 
Cole  Banking   Co.  v.   Sinclair,  225. 
Coleman  v.  Dunlap,  67. 
Colgate  V.   Buckingham,  65. 
Collier  v.   Gray,  109. 
Collins  V.  Bradbury,  52. 
V.  Everett,  198. 
V.  Seay,  191. 
V.  Trotter,  65. 
Colms  V.  Bank  of  Tennessee,  271. 
Colonial   Nat.   Bank  v.   Duerr,  312, 

315. 
Colorado   Nat.   Bank  v.    Boettcher, 

115,  131,  136. 
Colt  V.  Barnard,  66. 
Columbian  Banking  Co.  v.  Bowen, 

2,  250,  251,  255. 
Commercial    Bank    v.    Armstrong, 
173. 
V.  Hart,  191. 
V.  Perry,  118. 
V.  Routh,  127. 
Commercial    Bank  of   Kentucky  v. 
Barksdale,  273,  274. 
V.  Varnum,  13,  269,  272. 
Commercial   Bank  of  Lexington  v. 

Wood,  334. 
Commercial    Nat.    Bank    v.    Burch, 
159. 
V.     Citizens'     State     Bank,     98, 

221. 
V.  Zimmerman,  256. 
Commonwealth  v.  Butterick,  110. 

V.  Kelliher,  9. 
Comparree   v.   Brockway,    171. 
Comstock  V.  Hier,  97. 
Condon  v.  Pearce,  171,  205. 
Conklin  v.   Roberts,  239. 
Conmey  v.  Macfarlane,  94. 
Conner  v.  Routh,  68. 
Connerly  v.  Planters'  &  Merchants' 
Ins.  Co.,  166, 


are  to  Pages. 

Cowing  V.  Altman,  21,  22,  35,  257. 
Cowperthwaite  v.  Sheffield,  286. 
Conroe  v.  Case,  30. 
Conselyea  v.  Swift,  103. 
Consolidation    Nat.    Bank  v.    Kirk- 
land,  221,  222,  229. 
Continental  Nat.   Bank  v    Bell,  98, 
220. 

V.   Townsend,  215. 

V.  Wells,  87. 
Cook  V.  American  Tubing  &  Web- 
bing Co.,  103,  105,  229. 

V.   Litchfield,  293. 

V.  Mutual  Ins.  Co.,  7. 

V.  Renick,  8. 

V.  Satterlee,  49,  52. 
Cooke  V.  Pomeroy,  277. 
Coolidge  V.  Brigham,  202,  310. 

V.    Payson,   151. 

V.   Ruggles,   49. 

V.  Wiggin,  207,  208. 
Cooper  V.  Bailey,  168,  180. 

V.  Brewster,  70. 
Corbett  v.  Clark,  51. 

V.  Fetzer,  177. 
Corbitt  V.  Stonemetz,  56. 
Corcoran  v.  Doll,  317. 
Cork  V.  Bacon,  110. 
Corn  Exchange  Bank  v.  American 

Dock  &  Trust  Co.,  47. 
Cortelyou  v.  Maben,  134. 
Cortland  Wagon  Co.  v.  Lynch,  33. 
Corwith   V.   Morrison,  67,  255. 
Cossel  V.  Regierer,  14. 
Costelo  V.  Crowell,  87. 
Coster  V.   Thomason,  290. 
Costin  V.  Rankin,  294. 
Cothran  v.  Collins,  323. 
Coulter  V.  Richmond,  198. 
County  Com'rs  of  Prince  George's 
County  V.  Com'rs  of  Laurel,  9. 
Coursin  v.  Ledlie's  Adm'r,  44. 
Courtney  v.  Doyle,  93. 
Cowan  V.  Hallack,  144. 


TABLE  OF  CASES. 


39.3 


References 

Covvton    V.    Wickersham,    193. 
Cox  V.  Belthoover,  82. 

V.    Citizens'    State    Bank,    257, 
258,  274. 

V.  Cline,  228,  229. 

V.   National   Bank,  243. 

V.   Palmer,  318. 

V.  Troy,  132. 
Cox's  Adm'r   v.  Jones,  66. 
Coyle's      Ex'r       v.      Satterwhite's 

Adm'r,    64. 
Craig    V.    Palo    Alto    Stock    Farm, 

210. 
Credit    Co.    v.    Howe    Mach.     Co., 

193. 
Creteau  v.  Foote,  255. 
Cribbs  v.  Adams,  272. 
Crider  v.  Shelby,  70. 
Cristy  v.  Campau,  233. 
Crittenden  v.  White,  45. 
Cromer  v.  Piatt,  286. 
Cromwell  v.  County  of  Sac,  240. 
Cronly  v.  Hall,  213. 
Crosby  v.  Grant,  215. 

V.  Roub,  165,  166. 

V.  Wright,  205. 
Cross  V.  Brown,  175. 

V.  Hollister,  176. 
Crout  V.  De  Wolf,  310. 
Crump  V.  Berdan,  56. 
Culbertson  v.  Nelson,  58. 

V.  Salinger,  93. 
Culver   V.    Hide    &   Leather    Bank, 
234. 

V.  Marks,  82,  283. 
Cumings  v.  Kent,  189. 
Cumming  v.  Roderick,  302. 
Cundiflf  V.  Campbell,  94. 
Cunningham  v.  Woodbridge,  227. 
Currier  v.   Lockwood,  45. 
Curry  v.  Bank  of  Mobile,  185. 
Curtis  V.  Sprague,  81. 
Cushman  v.  Haynes,  55,  87. 
Cuyler  v.  Stevens,  292. 


are  to  Pages. 


D. 


Dalrymple  v.  Hillenbrand,  205. 
Dana  v.  San  Francisco,  54. 

V.   Sawyer,   122. 
Daniel  v.  Glidden,  33. 
Daniels  v.  Kyle,  245. 

V.  Wilson,  239. 
Darwin  v.  Rippey,  316. 
Daskam  v.  Ullman,  163. 
Davenport  v.  Gilbert,  300. 
Davidson  v.  Cooper,  311. 

V.   Lanier,  36. 
Davis  V.  Bank  of  Tennessee,  294. 

V.  Barron,   198. 

V.  Bechstein,  159. 

V.  Crawford,  318. 

V.   Garr,  75. 

V.  Howell  Cotton  Co.,  234. 

V.  Lee,  237. 

V.  Miller,  183,  338,  339. 

V.  Peck,  181. 

V.  Wait,  100. 
Davis   Sewing   Mach.    Co.   v.   Best, 

213. 
Davy  V.  Kelle}^  234. 
Dawson  v.  Wombles,  92. 
Day  V.  Ramsdell,  34. 
Deahy  v.  Choquet,  197,  281,  334. 
Dean  v.  DeLezardi,  22. 
Deberry  v.  Darnell,  63. 
Decroix,  Verley  et  Cie  v.  Meyer  & 

Co.,  143. 
Deener  v.  Brown,  116. 
Deering  v.  Creighton,   198. 
DeForest  v.  Frary,  53. 
De  Hass  v.  Roberts,  56,  57. 
Dehoust  V.   Lewis,  257,  258. 
Deininger  v.   Miller,  289. 
DeLand  v.  Dixon  Nat.  Bank,  309. 
Demelman   v.    Brr.zier,  8,   229,   269, 

272. 
Denny  v.  Palmer,  304. 
Devries  &  Co.  v.  Shumate,  35,  36. 


396 


TABLE  OF  CASES. 


References 
DeWitt  V.  Perkins,  240. 
Dickens  v.  Beal,  295. 
Dickenson  v.  Marsh,  136. 
I^ickins  v.  Beal,  246. 
Dill  V.  White,  111. 
Dinsmore  v.   Duncan,  82,  222. 
Ditch  V.  Western  Nat.  Bank,  173. 
Diversy  v.  Moor,  193. 
D.   M.   Osborn  &  Co.  v.   Hubbard, 

43. 
Dockray  v.  Dunn,  96. 
Dodd  V.  Denny,  66. 

V.  Dunne,  36. 
Dodge  V.  Bank  of  Kentucky,  291. 

V.  Emerson,  55. 
Dodson  V.  Taylor,  289,  290. 
Doherty  v.  Perry,  51. 
Dole  V.  Gold,  293. 
Doll  V.  Hollenbeck,  166. 
Donnell     v.     Louis     County     Sav. 

Bank,  291. 
Donovan  v.  Fox,  234. 
Doom  V.  Sherwin,   176,   197. 
Dorsey  v.  Wellman,  4. 

V.  Wolff,  60,  61. 
Doubleday  v.   Kress,  247. 
Douglass  V.  Wilkenson,  167. 
Downes  v.  Church,  329. 

V.  Richardson,  104. 
Downey  v.  O'Keefe,  196. 
Drake  v.  Rogers,  22. 
Dreilling  v.    First   Nat.    Bank,   221. 
Drennan  v.   Bunn,   177. 
Dresser  v.  Missouri  &  L  R.  Const. 

Co..  223. 
Drew  V.  Wheelihan,  217. 
Drexler'v.  McGlynn,  286,  289. 
Dubois  V.   Stoner,  325. 
Duerson's  Adm'r  v.  Alsop,  7. 
Duncan  v.  Duncan,  43. 
Dunham   v.    Peterson,  97. 
DuPont  V.  Beck,  94. 
Dupont  V.  Mt.  Pleasant  Ferry  Co., 
182. 


are  to  Pages. 

Dupont     de    Nemour    Powder   Co., 

E.  I.  V.  Rooney,  301. 
Durant  v.  Murdock,  109. 
Durham  v.   Price,  304. 
Durkin  v.  Cranston,  14,  329. 
Duty  V.  Sprinkle,  210. 


E. 


Easterly  v.  Barber,  208. 

Eastman   v.    District   Tp.   of   Lyon, 
233. 
V.  Plumer,  325. 

East    River    Bank    v.    Butterworth, 
328. 

Eaton  V.  Alger,  175. 
V.  Carey,  338,  339. 

Edelman  v.  Rams,  11. 

Edison  v.  Babka,  158. 

Edison  General  Elec.  Co.  v.  Blount, 
101. 

Edmonston  v.  Ascough,  28. 

Edward  Hines  Lumber  Co.  v.  An- 
derson, 133. 

Edwards  v.  Porter,  100. 
V.  Walters,  337. 

Eicelberger  v.  Old  Nat.  Bank,  27. 

E.   L   Dupont  de   Nemour  Powder 
Co.  V.  Rooney,  301. 

Eldred  v.  Malloy,  49. 

Eldrege  v.  Chacon,  334. 

Elgin  City  Banking  Co.  v.  Hall,  176, 
197,  217,  221,  226,  229,  282. 

Elliott  V.  Brady,  205. 
V.  Levings,  314. 

Ellsworth  v.  Fogg,  322. 

Emerson  v.  Opp,  318. 

Emery  v.  Hobson,  257,  283. 

Emmons  v.  Meeker,  20. 

English  v.  Beneman,  21. 

Enright  v.  Beaumond,  323. 

Erickson  v.  First  Nat.  Bank,  316. 
v.  Inman,  Poulson  &  Co.,  134. 

Ernst  v.  Steckman,  57. 


TABLE  OF  CASES. 


397 


References 

Ervin  v.  Brooks,  66. 
Ervvin  v.  Shaffer,  103. 
Estabrook  v.  Boyle,  229. 
Estes  V.  Tower,  263. 
Evans  v.   Freeman,   176,  228. 

V.  Williamson,   100. 
Evertson  v.  Nat.  Bank  of  Newport, 

42,  81. 
Ewald  V.  Foulhaber  Stable  Co.,  281. 
Ewer  V.   Meyrick,  56. 
Exchange  Bank  v.  Sutton  Bank,  114, 

116. 


Faile  v.  Crawford,  93. 
Fairchild  v.   Feltman,    135. 

V.   Ogdensburgh,   C.   &  R.   Co., 
283. 
Fall  River  Union  Bank  v.  Willard, 

118,  122. 
Farber  v.  National  Forge  &  I.  Co., 

104. 
Farmer  v.  Bank  of  Graettinger,  68. 

V.  Rand,  298. 
Farmers'  Bank  v.  B.ooke,  229. 
Farmers'  Bank  of  Grand  Rapids  v. 

Butler,  233. 
Farmers'  Bank  of  Kentucky  v.  Ew- 

ing,  19,  305. 
Farmers'  Bank  of  Virginia  v.  Gum- 

mell,  305. 
Farmers'   Bank  &  T.   Co.   v.    New- 
land,  116. 
Farmers'  Loan  &  Trust  Co.  v.  Ol- 
son,  317. 
Farmers'  Nat.  Bank  v.  Sutton  Mfg. 
Co.,  60,  61. 
V.  Thomas,  25, 
V.  Venner,  244,  245. 
Farmers'     &     Mechanics'    Bank    v. 

Day,  182. 
Farmers'     &     Merchants'    Bank    v. 
Bank    of    Rutherford,   170, 
204. 


are  to  Pages. 

Farmers'    &    Merchants'    Bank    v. 
Battle,  300. 

V.  Dunbier,  149. 
Farnsworth  v.  Allen,  250. 

V.  Drake,  77. 

V.  Mullen,  262. 
Farquhar  v.  Fidelity  Ins.  Co.,  62. 
Farquhar  Co.,  A.  B.  v.  Higham,  196, 

199,  206. 
Far  Rockaway  Bank  v.   Norton,  5, 

196,  200. 
Farwell  v.  Ensign,  208. 

V.  St.  Paul  Trust  Co.,  277. 
Fassin  v.  Hubbard,  289. 
Feigenspan  v.  McDonnell,  290. 
Fellspoint  Sav.  Inst.  v.  Weedon,  49. 
Fenderson  v.  Owen,  22. 
Ferner  v.  Williams,  262. 
Fcrress  v.  Tavel,  97. 
Fessenden  v.  Summers,  198. 
Fielding  &  Co.  v.  Corry,  299. 
Fife  V.  Oshkosh,  4. 
Finch  V.  De  Forest,  168. 
First  Nat.  Bank  v.  Alexander,  258. 

V.  Alton,  48,  103. 

V.  Babbidge,  227. 

V.  Badger  Lumber  Co.,  30. 

V.  Bryan,  234. 

V.  Buckhannon  Bank,  258. 

V.  Buttery,  68,  69,  334. 

V.  Bynum,  57,  58,  60,  213. 

V.  Carson,  25. 

V.  Chilson,  326. 

V.Clark,  116,  151,  152. 

V.  Crittenden,  274. 

V.  Currie,  148,  150,  258,  266,  281. 

V.  Day,  193. 

V.  Farneman,  298. 

V.  Foote,  94. 

V.  Gay,  60. 

V.  Getz,  328. 

V.  Gridley,  27,  179,  206,  304,  313, 
327. 

V.  Hall,  182. 

V.  Hatch,  292. 


398 


TABLE   OF  CASES. 


References 

First  Nat.  Bank  v.  Heuschen,  248. 

V.  Larsen,  49,  58,  60,  87. 
,      V.  Laughlin,  316. 
V.  Lightner,  50,  51. 
V.  Lineberger,  334. 
V.  Loyhed,  180. 
V.  McCullough,  182,  227. 
V.  Maxfield,  321. 
V.  Miller,  2,  59,  257,  298. 
V.  Northwestern  Nat.  Bank,  195, 

205. 
V.  Ruhl,  234. 

V.  Scott  County  Com'rs,  214. 
V.  Slaughter,  60,  88. 
V.  Smith,  287. 
V.  Snell,  139. 
V.  Watkins,  327. 
V.  Whitman,  149. 
First    Nat.    Bank     of     Decorah     v. 

Laughlin,  60. 
First  Nat.  Bank  of  El  Paso  v.  Mil- 
ler, 96,  278. 
First  Nat.   Bank  of  Jersey  City    v. 

Leach,  150. 
First  Nat.  Bank  of  Marshalltown  v. 

Marshalltown  State  Bank,  310. 
First   Nat.    Bank  of   Rapid   City  v. 

Security  Nat.  Bank,  47. 
First    Nat.    Bank     of    Salisbury    v. 

Michael,  51. 
First    Nat.    Bank   of   Springfield    v. 

Skeen,  69,  234. 
First  Nat.  Bank  of  Wilkes-Barre  v. 
Barnum,  24,  27,  222,  311,  312,  313, 
316. 
Fisher  v.  Beckwith,  139. 
Fisk  V.  Miller,  198. 
Fitch  V.  Brockmon,  158. 
Fitzpatrick  v.   School   Com'rs,   309. 
Flagg  V.  School  Dist.  No.  70,  58. 
Flanagan  v.  Mitchell,  140,  144. 
Fletcher  v.  Schaumburg,  76. 
Flint  V.  Flint,  167. 
V.  Rogers,  251. 


are  to  Pages. 

Florence  Oil  &  Refining  Co.  v.  First 

Nat.  Bank,  243,  244,  245. 
Flournoy  v.  First  Nat.  Bank,  193, 
Floyd  County  Com'rs  v.  Day,  53. 
Folger  V.  Chase,  165. 
Forbes  v.  Espy,  ^^ . 
Ford  V.  McClung,  257. 
Forepaugh  v.  McClung,  257. 
Foster  v.  Hill,  179. 

V.  McDonald,  287. 
Fountain  v.  Bookstaver,  165,  180. 
Fourth  Nat.  Bank  v.  Altheimer,  290. 
Fowler  v.  Gate  City  Nat.  Bank,  134. 
Fox  V.  Bank  of  Kansas  City,  222. 

V.  Rural  Home  Co.,  102,  105. 
Frank  v.  Kaigler,  167. 

V.  Wessels,  49. 
Frankland  v.  Johnson,  31. 
Franklin  v.  Baker,  317. 

V.  March,  46. 

V.  Vanderpool,  246. 
Franklin    Sav.    Inst.    v.    Heinsman, 
222. 

V.  Reed,  112. 
Frederick  v.  Winans,  166. 
Fredin  v.  Richards,  227. 
Freeman  v.  Exchange  Bank,  173. 

V.  Perot,  155. 

V.  Perry,  163. 
Freeman's  Bank  v.  Perkins,  247. 

V.  Ruckman,  85. 
Freeman's    Nat.    Bank   v.    National 

Tube-Works,  174. 
French  v.  Bank  of  Columbia,  285. 

V.  Barney,  81. 

V.  French,  328. 

V.  Jarvis,  67,  185,  338,  339. 

V.  Turner,  163. 

V.  Wallack,  37. 
Friedenberg  v.  Robinson,  334, 
Frost  V.  Fisher,  62. 
Fry  V.  Rousseau,  62. 
Fugitt  V.  Nixon,  121. 
Fuller  V.  Arnold,  160. 


TABLE  OF  CASES. 


390 


References 

Fuller  Buggy  Co.  v.  Waldron,  282, 

300. 
Fullerton  v.  Sturges,  237. 
Funk  V.  Babbitt,  84,  110,  111. 
Furgerson  v.  Staples,  53,  205. 


G. 


Galbraith  v.  Shepard,  281. 

Galpin  v.  Hard,  264. 

Galusha  v.  Sherman,  213. 

Gamewell  v.  Mosely,  94. 

Gandy  v.  Bissell's  Estate,  Zl . 

Gardner  v.  Bank  of  Tennessee,  13, 
269,271. 

Garfield  Nat.  Bank  v.  Colwell,  37. 

Garrard  v.  Haddan,  313. 

Garrettson  v.  North  Atchison  Bank, 
135. 

Garrigus  v.  Home,  Frontier  &  For- 
eign Missionary  Soc,  2)1 . 

Garver  v.  Pontious,  61. 

Gates  V.  Beecher,  248,  293. 
V.  Parker,  152. 

Gawtry  v.  Doane,  302. 

Gay  V.  Rooke,  45. 

Gaylord  v.  Van  Loan,  109. 

Gaytes  v.  Hibbard,  65. 

Gazzam  v.  Armstrong,  330,  331. 

Geddes  v.  Blackmore,  236. 

Genesee     County     Sav.     Bank     v. 
Kindt,  232. 

George,  In  re,  337. 

Georgia   Nat.   Bank  v.    Henderson, 
IS. 

Georgia  Seed  Co.  v.  Talmadge  & 
Co.,  115. 

German-American  .  Bank    v.     Cun- 
ningham, 229,  231. 
V.  Mills,  256. 

Germania  Bank  v.  Distler,  235. 

Germania  Nat.  Bank  v.  Mariner,  29, 
196. 
V.  Taaks,  152. 


tre  to  Pages. 
Gervais  v.  Baird,  29. 
Gf^t'-'-'^burg  Nat.  Bank  v.  Chisholm, 

313. 
Gibos  V.  Cannon,  282. 

V.  Guaraglia,  196,  200. 

V.  Linabury,  234. 
Gibson  v.  Hunter,  11. 

V.  Minet,  11. 
Giddings  v.  McCumber,  185. 
Giffert  v.  West,  202. 
Gill  V.  Palmer,  293. 
Gillett  V.  Sweat,  321. 
Gilley  v   Harrell,  3,  72. 
Gilliam  v.  Davis,  327. 
Gillilan  v.  Myers,  139. 
Gilmore  v.  Hirst,  55,  60. 
Gilpin  V.  Savage,  2,  92,  242,  263,  264. 
Girard  Bank  v.  Bank  of  Pennsylva- 
nia Tp.,  150. 
Glenn  v.  Farmers'  Bank,  233,  241. 
Glickauf  v.  Kaufmann,  267. 
Glidden  v.  Chamberlin,  202. 
Gloucester  Bank  v.  Worcester, 

334. 
Glover  v.  Gentry,  318. 
Goodin  v.  Buhler,  55. 
Goodloe  V.  Taylor,  71. 
Goodman  v.  Simonds,  20,  236. 
Goodnow  v.  Warren,  289. 
Goodwin  v.  Davenport,  66. 
Goose  River  Bank  v.  Willow  Lake 

School  Tp.,  53. 
Gordon  v.  Adams,  38. 

V.  Anderson,  74,  82. 

V.  Levine,  257,  258. 

V.  Wansey,  321. 
Goshen  Nat.  Bank  v.  Bingham,  163, 

195,213. 
Goss  V.  Nelson,  70. 
Gough  V.  Staats,  245. 
Gould  V.  Stevens,  240. 
Gove  V.  Downer,  65. 
Gowcn  V.  Jackson,   i21. 
Graham  v.  Smith,  98. 


400 


TABLE   OF  CASES. 


References 

Grammel  v.  Carmer,  114. 
Grange  v.  Reigh,  245,  258. 
Granite  Bank  v.  Ayers,  248. 
Grant  v.  Ellicott,  140. 

V.  Shaw,  147. 

V.  Walsh,  233. 

V.  Wood,  49. 
Grant  County  v.  Sels,  8. 
Graul  V.  Strutzel,  66. 
Gravert  v.  Goothard,  87. 
Gray  v.  Bowden,  45. 

V.  Boyle,  232. 

V.  Wood,  23. 
Graydon  v.  Patterson,  326. 
Greeley  v.  City  of  Jacksonville,  8. 
Greely  v.  Cascade  County,  257. 
Green  v.  Darling,  245. 

V.  Drebilbis,  66. 

V.  Goings,  191. 

V.  Wilkie,  223. 
Greene  v.  Duncan,  144,  192. 
Greenfield  Bank  v.  Crafts,  309. 
Greenwich  Bank  v.  DeGroot,  295. 
Greneaux  v.  Wheeler,  81. 
Greve  v.  Schweitzer,  322. 
Grier  v.  Cabbie,  183. 
Griffin  v.  Erskine,  182. 
Griffiths  V.  Kellogg,  223. 
Grimes  v.  McAninch,  166. 

V.  Piersol,  170. 
Grosvenor  v.  Stone,  332. 
Guerrant  v.  Guerrant,  237. 
Guignon  v.  Union  Trust  Co.,  296. 
Gumz  V.  Giegling,  198. 
Gurnee  v.  Hutton,  131. 
Gushee  v.  Eddy,  64. 
Guttman  v.  Abbott,  199,  201,  281. 
Gwyn  V.  Lee,  166. 

H. 

Haber  v.  Brown,  264. 
Habersham  v.  Lehman,  170. 
Hacket  v.  Linares,  209. 


are  to  Pages. 

Hackney  v.  Jones,  72, 
Hadden  v.  Dooley,  327. 
Haddock  v.  Woods,  63. 
Haddock,  Blanchard  &  Co.  v.  Had- 
dock, 103,  191,  200,  207,  208. 
Haeberle  v.  O'Day,  133. 
Hagerthy  v.  Phillips,  339. 
Haines  v.  Dubois,  165. 

V.  Nance,  144. 
Hall  V.  Auburn  Turnpike  Co.,  105. 

V.  Bank  of  the  Commonwealth, 
27. 

V.  First  Nat.  Bank,  229. 

V.  Newcomb,  198. 

V.  Tufts,  83. 

V.  Wilson,  222. 
Hallowell  v.  Curry,  297. 
Halstead  v.  New  York,  233. 
Hamill  v.  German  Nat.  Bank,  327. 

V.  Mason,  213. 
Hampson  v.  Owens,  159. 
Hanauer  v.  Anderson,  305. 
Handy  v.  Sibley,  98,  220. 
Handyside  v.  Cameron,  29. 
Hankin  v.  Squires,  131. 
Hannurn  v.  Richardson,  177. 
Hanover    Nat.    Bank    v.    American 

Dock  &  Trust  Co.,  47. 
Hapgood  V.  Needham,  94. 
Harden  v.  Boyce,  259,  305. 
Hardie  v.  Wright,  234. 
Harding  v.  Waters,  267. 
Hardy  v.  Waters,  178. 
Harmon  v.  Old  Detroit  Nat.  Bank, 

7S,  308. 
Harpending  v.  Gray,  233,  323. 
Harper  v.  Young,  239. 
Harriman  v.  Sanborn,  52. 
Harrington  v.  Johnson,  217. 
Harris  v.  Coleman  &  A.White  Lead 
Co.,  112. 

V.  Fowler,  98. 

V.  Robinson,  286. 


TABLE   OF   CASES. 


4U1 


References  are  to  Papes. 


Harrison  v.  Crowder,  251. 

V.  Nicollet  Nat.  Bank,  15. 
Harrow  v.  Dugan,  46. 
Harsh  v.  Kleeper,  315. 
Hart  V.  Adler,  239. 

V.Smith,  118. 

V.  Wills,  263. 
Harvey  v.  Baldwin,  61. 

V.  Cane,  147. 

V.  Dimon,  3. 

V.  Irvine,  112. 

V.  Smith,  314. 
Hasbrook  v.  Palmer,  63. 
Haseltine  v.  Dunbar,  144. 
Hasey  v.  White  Pidgeon   Beet-Su- 
gar Co.,  110. 
Haskell  v.  Cornish,  34. 

v.  Lambert,  87. 

v.  Mitchell,  214. 
Haslett  v.  Ehrick,  335. 
Hastings  v.  Thompson,  59. 
Hatcher  v.  Independence  Nat. 

Bank,  98,  220. 
Hatton  V.  Jones,  36. 
Haueiwas  v.  Goodloe,  22. 
Haugan  v.  Sunwall,  217. 
Havens  v.  Huntington,  338. 

V.  Potts,  91. 
Hawes  v.  Blackwell,  116. 
Hawkins  v.  Young,  230. 
Hawks  V.  Truesdell,  99. 
Hawley  v.  Jette,  IS. 
Hayden  v.  Strong,  176. 
Hays  V.  Gwin,  49. 
Hazard  v.  Spencer,  85. 
Hazelton  Mercantile   Co.  v.  Union 

Imp.  Co.,  144. 
Heard   v.    Dubuque    County    Bank, 

57. 
Heath  v.  Blake,  315. 

v.   Silverthorn   Lead  Mining  & 
Smelting  Co.,  219,  326. 
Heaton  v.  Hulbert,  282. 

Opp. — Sel. — 26 


Hefner  v.  Dawson,  310. 

v.  Vandolah,  310. 
Hegeler  v.  Comstock,  56,  90. 
Hegeman  v.  Moon,  70,  94. 
Heist  V.  Hart,  223. 
Heitschmidt  v.  McAlpin,  133. 
Hellernian   v.    Schantz,    162. 
Helmer  v.  Krolick,  217. 
Hemmenway  v.  Stone,  111,  216. 
Hemphill  v.  Yerkes,  116. 
Henderson  v.  Pope,  12. 
Henrietta  Nat.   Bank  v.  State  Nat. 

Bank,  134,  135,  149. 
Hensel  v.  Chicago,  St.  P.,  M.  &  O. 

R.  Co.,  25. 
Henshaw  v.  Root,  15,  269. 
Herdic  v.  Roessler,  45. 
Herdman  v.  Wheeler,  215,  236,  237. 
Hereth  v.  Meyer,  51. 
Hermann's  Ex'r  v.  Gregory,  97,  218, 

219. 
Herrick  v.  Baldwin,  263. 

V.  Bennet,  66. 

v.  Gallagher,  204. 

V.  Woolverton,  216. 
Herring  v.  Woodhull,  167. 
Herter  v.  Goss  &  Edsall  Co.,  144. 
Heuertematte  v.  Morris,  193,  218. 
Heywood  v.  Wingate,  74. 
Hibbard  v.  Matthews,  290. 
Hibbs  V.  Brown,  52,  53. 
Hickok  V.  Bunting,  92,  93. 
Hidden  v.  Waldo,  139. 
Higgins  V.  Morrison,  291. 

V.  Ridgway,  189. 
Higginson  v.  Gray,  96. 
Hilborn  v.  Alford,  29. 
Hildeburn  v.  Curran,  101. 
Hill  v.  Buchanan,  207. 

v.  Buckminister,  99. 

v.  Buddington,  185. 

v.  Hall,  36,  37. 

V.  Place,  326. 


402 


TABLE  OF  CASES. 


References 
Hill  V.  Planters'  Bank,  287. 

V.  Todd,  59. 
Hindert  v.  Schneider,  95. 
Hinsdale  v.  Miles,  276. 
Hinton  V.  Bank  of  Columbus,  321. 
Hirsch  v.  Oliver,  189. 
Hobart  v.  Penny,  240. 
Hobbs  V.  Straine,  304. 
Hocking    Valley    Bank    v.    Barton, 

214. 
Hodge  V.  Smith,  36,  11,  223,  224,  225, 
229,  230,  328. 

V.  Wallace,  214. 
Hodges  V.  Clinton,  62. 

V.  Nash,  104,  221,  234. 

V.  Shuler,  90,  293. 
Hodgkins  v.  Moulton,  189. 
Hoffman    v.    Bank     of     Milwaukee, 
194. 

V.  Planters'  Nat.  Bank,  316. 
Hoge  V.  Lansing,  222. 
Hogue  V.  Williamson,  63. 
Hoit  V.  Mclntire,  35. 
Holbrook  v.  Payne,  114,  136. 
Holcomb  V.  Wyckoff,  233. 
Holden  v.  Davis,  329. 
Holeman  v.  Hobson,  233. 
Holland  Trust  Co.  v.  Waddell,  104, 

221,  327. 
Hollinshead  v.  John  Stuart  &  Co., 

56,  57. 
Holmes  v.  Bank  of  Ft.  Gaines,  313. 

V.  Roe,  258. 
Holt  V.  Ross,  192. 
Holtz  V.  Boppe,  263. 
Home  Ins.  Co.  v.  Green,  293. 
Home  Sav.  Bank  v.  Hosie,  255. 

V.  Stewart,  37,  322. 
Hood  V.  Nichols,  309. 

V.  Robbins,  171. 
Hook  V.  Pratt,  173,  174. 

V.  White,  327. 
Hoopes  V.  CoUingwood,  25. 
Hoover  v.  McCormick,  276. 


are  to  Pages. 
Hopkins  v.  Farwell,  321. 
Hopper-Morgan  Co.,  In  re,  96,  97; 

98,  219. 
Horner  v.  Horner,  66. 
Horowitz  v.  Wollowitz,  206. 
Horton   v.   Arnold,   101. 
Hosstatter  v.  Wilson,  90. 
Hosteller  v.  Hoke,  34. 
Hotchkiss  v.  Mosher,  47. 
Hough  v.  Loring,  138,  144. 
Houghton  V.  First  Nat.  Bank,  181. 
House  V.  Adams,  118,  278,  303. 

V.  Vinton  Nat.  Bank,  126,  291. 
Howard  v.  Duncan,  30,  309. 

V.  Palmer,  101. 

v.  Windham  County  Sav.  Bank, 
48. 
Howard  Bank  v.  Carson,  245. 
Howe  V.  Ould,  167. 
Howell  V.  Boyd  Mfg.  Co.,  114. 

V.Todd,  621. 

V.  Wright,  94. 
Howes  V.  Austin,  246. 
Howry  V.  Eppinger,  112. 
Hoxie  V.  Hodges,  96. 
Hoyt  V.  Seeley,  245. 
Hubbard  v.  Chapin,  223. 

V.  Moseley,  49. 

V.  Troy,  269. 
Hudson  V.  Emmons,  51. 

V.  Matthews,  8. 
Huff  V.  Ashcraft,  248. 

V.  Wagner,  240. 
Hughes  V.  Fisher,  144. 

V.  Kiddell,  167. 

V.  Wheeler,  328. 
Hughitt  V.  Johnson,  58,  89. 
Hull  V.  Myers,  285,  339. 
Hunt  V.  Johnson,  244. 

V.  Sanford,  240. 

V.  Williams,  144. 
Hunter  v.  Allen.  213,  227. 

V.  Blodgett,  n. 

V.  Hempstead,  185,  248. 


TABLE   OF   CASES. 


403 


References 
Hunter  v.  Wood,  109. 
Hurlburt    v.   Hall,  315. 
Hurt  V.  Ford,  38. 
Husband  v.  Epling,  70. 
Husbrook  v.  Wilder,  19,  66,  109. 
Huston  V.  Newgass,  192. 
V.  Young,  233,  234. 


Illinois  Conference  v.  Plagge,  171. 
Inglish  V.  Breneman,  315. 
Ingraham  v.  Gibbs,  329. 
International  Bank  v.  Vankirk,  233. 
International    Imp.    Fund   Trustees 

V.  Lewis,  42. 
Iowa  Nat.  Bank  v.  Carter,  229. 
Iowa   Val.   State   Bank  v.   Sigstad, 

276,  305. 
Ireland  v.  Schaipenberg,  230. 
Iron  Clad  Mfg.  Co.  v.  Sackin,  262. 
Irving  Nat.  Bank  v.  Alley,  74. 
Isaack  v.  Porter,  96. 
Iselin  V.  Chemical  Nat.  Bank,  140, 

193. 

J. 

Jack  V.  Davis,  159. 
Jacks  V.  Rarrin,  284. 
Jackson  v.  Myers,  42. 

V.  Tilghman,  53. 

V.  Tribble,  29. 
Jackson  Bank  v.  Irons,  198. 
Jacobs  V.  Benson,  83. 

V.  Mitchell,  113. 
James  v.  Ocoee  Bank,  244. 

V.  Wade,  278. 
Jamieson    &    McFarland  v.  Heim, 

233,  308. 
Jaquin  v.  Warren,  46. 
Jarvis  v.  Wilson,  46,  133. 
Jaudon  v.  Read,  245. 
Jefferson  Bank  of  St.  Louis  v.  Chap- 
man-White-Lyons Co.,  226,  238. 


are  to  Pages. 

Jefferson    County   v.   Burlington    & 

M.  R.  Co.,  102. 
Jeffrey  v.  Rosenfeld,  3,  312. 
Jenkins  v.   Columbia  Land  &  Imp. 
Co.,  158. 

v.  Phillips,  33. 

v.  Wilkinson,  163. 
Jennings  v.  First  Nat.  Bank,  48. 

v.  Law,  95. 

v.  Todd,  225. 
Jerman  v.  Edwards,  185. 
Jessup  v.  Dennison,  235. 
Jewett  V.  Whalen,  30. 
J.  H.  Mohlman  Co.  v.  McKane,  95, 

97,  300. 
Jilson  v.  Hill,  65. 
Johns  V.  Harrison,  25. 
Johnson  v.  Brown,  295. 

V.  Buffalo    Center    State    Bank, 
182,  226. 

V.  Clark,  133. 

V.  Donnell,  173. 

v.  Glover,  215. 

V.  Henderson,  47,  63. 

V.  Mitchell,  170. 

V.  Parsons,  277. 

V.  Sutherland,  233. 

V.  Way,  217. 

V.  Williard,  176. 
Johnston  v.  Hoover,  24,  311. 

V.  Speer,  60. 
Johnston    Harvester    Co,   v.    Mac- 
Lean,  214,  236,  237. 
Jones  V.  Crawford,  60. 

V.  Degge,  101. 

V.  Fales,  63. 

V.  Hamlet,  309. 

V.  Lewis,  300. 

V.  Lowery  Banking  Co.,  159. 

V.  Radatz,  60. 

V.  Robinson,  66. 

V.  Shapera,  74. 

V.  Wiesen,  241. 


4o4 


TABLE  OF  CASES. 


Jordan  v.  Tarkington,  193. 

V.  Tate,  69. 

V.  Wheeler,  122. 
Jordon  v.  Long,  271. 
Joseph  V.  Salomon,  13,  269. 
Josselyn  v.  Lacier,  53. 
Joveshof  V.  Rockey,  93,  218. 
Joy  V.  Diefendorf,  229. 
J.  Regester's  Sons  Co.  v.  Reed,  229. 
Judah  V.  Harris,  63,  64. 
Juniata  Bank  v.  Hale,  292. 
Jurgens  v.  Wichmann,  298. 
J.  W.  O'Bannon  Co.  v.  Curran,  265. 
J.  W.  Perry  Co.  v.  Taylor  Bros., 
197. 

K. 

Kahnweiler  v.  Anderson,  114. 
Kalamazoo  Nat.  Bank  v.  Clark,  223. 
Kaskaskia  Bridge   Co.  v.  Shannon, 

13. 
Kaufman  v.  Barringer,   134. 
Kavanagh  v.  Bank  of  America,  11, 

lid. 
Keazer    v.    Colebrook     Nat.    Bank, 

338. 
Keene  v.  Behan,  223,  229. 
Keith  V.  Jones,  63,  64. 
Kelley  v.  Greenough,  151. 

V.  Hemmingway,  70. 
Kelly  V.  Brown,  245. 

V.  Burrough,  339. 

V.  Ferguson,  240. 
'  V.  Lynch,  140. 

V.  Whitney,  214,  225. 
Kemp  V.  Klaus,  89. 

V.  McCormick,  29. 
Kendall  v.  Galvin,  12,  139. 
Kennedy  v.  Thomas,  253. 
Kent  V.  May,  327. 
Kerby  v.  Ruegamer,  33. 
Kernohan  v.  Durham,  214. 
Kerr  v.  Anderson,  229. 


are  to  Pages. 
Keyes  v.  Fenstermaker,  66. 
Kidder  v.  Horrobin,  5. 
Kiel  V.  Choate,  208. 
Kieth  V.  Fork,  234. 
Kilgore  V.  Bulkley,  205,  293,  294. 
Killian  v.  Ashley,  199. 
Kilpatrick  v.  Heaton,  169. 
Kimball  v.  Donald,  131. 

V.  Huntington,  93. 
Kimball  Co.,  W.  W.  v.  Mellon,  57, 

88. 
Kimbro  v.  Lamb,  171. 
Kimpton  v.   Studebaker   Bros.    Co , 

91. 
King  V.  Crowell,  263,  264. 
V.  Doolittle,  97. 
V.  Fleece,  174,  175. 
V.  Hamilton,  63. 
V.  King,  191. 
V.  Mecklenburg,  30,  214. 
V.  Nichols,  227. 
Kinsely  v.  Sampson,  21. 
Kinyon  v.  Wohlford,  238. 
Kipp  V.  Smith,  226. 
Kirk   V.    Dodge    County    Mut.    Ins. 

Co.,  52. 
Kirkman  v.  Bank  of  America,  36. 
Kirkpatrick  v.  Hawk,  335. 
Kirksey  v.  Bates,  339. 
Kirkwood  v.   Exchange  Nat.  Bank, 
49. 
V.  Smith,  88. 
Kiskadden  v.  Allen,  53. 
Kitchen  v.  Loudenback,  240. 
Klar  V.  Kostink,  234. 
Kneeland  v.  Miles,  321,  325. 
Knickerbocker  Life  Ins.  Co.  v.  Pen- 
dleton, 13. 
Knight  V.  Tinney,  232,  241. 
Knights  &  Ladies  of  Security  v.  Hi- 
bernian Banking  Ass'n,  48,  49. 
Knott  V.  Tidyman,  214,  227. 
V.  Venable,  295. 
I 


TABLE   OF   CASES. 


m> 


References 

Knowles  v.  Knowles,  99. 

Knox  V.  Clifford,  97. 

Koehler  v.  Dodge,  241. 

Kohn  V.  Consolidated  Butter  &  Egg 

Co.,  200. 
Konig  V.  Bayard,  154,  330. 
Kost  V.  Bender,  241. 
Kramer  v.  Grant,  257,  328. 
Kuflick  V.  Glasser,  281. 
Kuhns    V.    Gettysburg    Nat.    Bank, 

222. 
Kurth    V.    Farmers'    &    Merchants' 

State  Bank,  316. 


L. 


La  Farge  v.  Kneeland,  204. 
Lahn  v.  Koep,  322. 
Laird  v.  State,  15. 
Lallerstedt  v.  Griffin,  194. 
Lamar  v.  Brown,  315. 
Lamb  v.  Storey,  56. 
Lampkin  v.  State,  28. 
Lancaster  Nat.  Bank  v.  Taylor,  214. 
Lane  v.  Bank  of  West  Tennessee, 
259,  278. 

V.  Kreckle,  77. 

V.  Stacy,  209. 

V.  Union  Nat.  Bank,  85. 
Langley  v.  Wadsworth,  229. 
Lapeyre  v.  Weeks,  74. 
Larkin  v.  Hardinbrook,  324. 
Larsen  v.  Breene,  149. 
La  Rue  v.  Groezinger,  158. 
Lassas  v.  McCarty,  92,  217,  239. 
Lawrence  v.  Dougherty,  64. 

V.  Miller,  286,  302. 

V.  Phipps,  144. 
Lawrence  Nat.  Bank  v.  Kowalsky, 

114. 
Lawson  v.  Farmers'  Bank  of  Salem, 

298. 
Lazier  v.  Horan,  326. 
Lea  V.  Branch  Bank  at  Mobile,  74. 


are  to  Pages. 
Leach  v.  Lewis,  97. 
Leake  v.  Burgess,  332. 
Leaphardt  v.  Sloan,  83. 
Leary  v.  Blanchard,  176. 
Leask  v.  Dew,  337. 
Leather     Manufacturers'     Bank    v. 

Morgan,  310. 
Leavitt  v.  Putnam,  66. 
Lebanon  Bank  v.  Mangan,  49. 
Lebanon  Nat.  Bank  v.  Long,  103. 
Ledwich  v.  McKim,  237. 
Lee  V.  Balcom,  46. 

V.  Field,  323. 

V.  Robinson,  114. 
Lee  Bank  v.  Spencer,  265. 
Legg  V.  Vinal,  264,  272. 
Leggett  V.  Raymond,  197. 
Leighton  v.  Preston,  160. 
Lennon  v.  Grauer,  205. 
Lenox  v.  Cook,  128. 

V.  Roberts,  298. 
Leonard  v.  Draper,  200,  205,  206. 

V.  Mason,  91,  133. 
Lester  v.  Given,  118. 

V.  Paine,  198. 
Levy  V.  Drew,  66. 
Lewinsohn  v.  Kent,  80. 
Lewis  V.  Berry,  114. 

V.  Bush,  159. 

v.  Clay,  215. 

V.  Long,  234. 

V.  Shepherd,  315. 

V.  Wilson,  42. 

V.  Woodfolk,  101. 
Libby  Bros.  Glass  Co.  v.  Farmers' 

&  Mechanics'  Bank,  115. 
Life  Ins.  Co.  v.  Pendleton,  283. 
Lilley  v.  Miller,  278,  284. 
Lincoln  v.  Hinzey,  28. 
Lindley  v.  First  Nat.  Bank,  152. 
Lindsay  v.  Price,  167. 
Lindsey  v.  McClelland,  47,  63. 
Lines  v.  Smith,  94. 
Linn  v.  Horton,  288. 


406 


TABLE  OF  CASES. 


References 

Litchfield  Bank  v.  Peck,  99. 
Littauer  v.  Goldman,  202,  310. 
Little  V.  Bailey,  34. 

V.  Blunt,  183. 

V.  Dunlap,  232. 

V.  Phenix  Bank,  63,  257. 
Little    Rock   Trust    Co.    v.    Martin, 

315,  317. 
Lloyd  V.  Osborne,  258. 
Lobdell  V.  Baker,  202. 
Lockwood  V.  Crawford,  264. 

V.  Twitchell,  102. 
Logue  V.  Smith,  179. 
Loizeaux  v.  Fremder,  323. 
Long  V.  Bank  of  Cynthiana,  325. 

V.  Gieriet,  103. 

V.  Stephenson,  281. 
Longmire  v.  Fain,  101. 
Lons  V.  Miller,  33. 
Loomis  V.  Ruck,  213. 
Looney  v.  Pinckston,  64. 
Louisville  Banking  Co.  v.  Gray,  51, 

60. 
Love  V.  Wall,  208. 
Lovinger  v.  First  Nat.  Bank,  328. 
Lowr  V.  Merrill,  315. 
Lowell  V.  Bickford,  37,  97,  104,  105. 
Lowell  Trust  Co.  v.  Pratt,  69,  301. 
Lowery  v.  Steward,  53. 
Lucas  V.  Byrne,  171. 
Luckenbach  v.  McDonald,  246,  311. 
Ludwig  V.  Iglehart,  334. 
Luflf  V.  Pope,  12,  131. 
Lynch  v.  First  Nat.  Bank,  114. 
Lynchburg  Milling  Co.  v.  National 

Exch.  Bank,  93. 
Lynchburg  Nat.  Bank  v.  Scott,  239. 
Lyon  V.  Ewings,  171. 

v.  Marshall,  82. 

V.  Martin,  89. 
Lysle  V.  Beals,  180. 

M. 

McAfee  v.  Glen  Mary  Coal  &  Coke 
Co.,  96. 


are  to  Pages. 

McAndrew  v.  Radway,  272. 

McCallum  v.  Driggs,  175,  198. 

McCandlish  v.  Cruger,  110. 

McCaskill  v.  Connecticut  Sav.  Bank, 
48. 

McClellan  v.  Morris,  109. 

McCord  V.  Curlee,  269. 

McCormick  v.  Holmes,  238. 

McCormick  Harvesting  Mach.   Co. 
v.  Lauber,  315. 

McCornick  v.  Swem,  59,  229. 

McCreary  v.  Parsons,  101. 

McDaniel  v.  Maxwell,  114,  115, 
V.  Whitsett,  316. 

McDonald  v.  Bailey,  81. 
V.  Mosher,  259. 

McDowell  v.  Cook,  332. 

McFarland  v.  State  Bank  of  Chase, 
232,  241. 

McGeorge  v.  Chapman,  293. 

McGowan  v.  Collins,  29. 

McGrath  v.  Clark,  25. 
v.  Pitkin,  233. 

McGregory  v.  McGregory,  276. 

Mcintosh  v.  Lytle,  81. 

Mclntyre   v.    Michigan    State     Ins. 
Co.,  243. 

Mackey  v.  St.  Mary's  Church,  42. 

Mackintosh  v.  Gibbs,  1,  4. 

McLaren  v.  Marine  Bank  of  Geor- 
gia, 284. 

McLeod  V.  Hunter,  66. 
v.  Snyder,  179. 

McMasters  v.  Dunbar,  75. 

McMichan's  Estate,  In  re,  340. 

McMillan  v.  Hefiferlin,  315. 

McMoran  v.  Lange,  5,  199. 

McNabb  v.  Tally,  140. 

McNeil  v.  Wyatt,  299. 

McNight  V.  Parsons,  221,  226,  229. 

Macomber  v.  Parker,  158. 

Macy  v.  Kendall,  104. 

Madison     Square     Bank   v.    Pierce, 
339. 

Magee  v.  Dunbar,  290. 


TABLE   OF   CASES. 


407 


References 
Maguire  v.  Eichmeier,  318. 
Mahone  v.  Central  Bank,  335. 
Mahon's  Adm'r  v.  Sawyer,  5. 
Main  v.  Hilton,  74. 
Maitland  v.  Citizens'  Nat.  Bank,  97, 

104,  221. 
Maldaner  v.  Smith,  318. 
Manchester  v.  Van  Brunt,  334. 
Manchester  Bank  v.  Fellows,  287. 
Manegold  v.  Dulau,  179. 
Manley  v.  Geagan,  133. 
Mann  v.  Nat.  Bank,  222. 
Manning  v.  Lyon,  265. 

V.  Maroney,  278. 
Manufacturers'  &  Traders'  Bank  v. 

Hazard,  305. 
Manufacturing  Co.  v.  Summers,  97. 
Maples   V.   Traders'    Deposit   Bank, 

265. 
Marine  Nat.  Bank  v.  National  City 

Bank,  194,  310. 
Marion   &  M.   Gravel   Road   Co.   v. 

Kessinger,  165. 
Markey  v.  Corey,  57,  176. 
Markland  v.  McDaniel,  265,  304. 
Markley  v.  Rhodes,  63. 
Marling  v.  Jones,  102,  105,  240,  338. 

V.  Nommensen,  322. 
Marr  v.  Johnson,  288. 
Marshall  v.  Sonneman,  286,  292. 
Martin  v.  Brown,  272. 
V.  Hayes,  167. 
V.  Stone,  70. 
Maryland  Fertilizing  &  Mfg.  Co.  v. 

Newman,  60. 
Mason  v.  Graff,  193. 

V.  Kilcourse,  207,  271. 
V.  Noonan,  183. 
V.  Prichard,  263. 
Massachusetts  Nat.  Bank  v.  Snow, 

24,  35,  81,  226,  238. 
Massie  v.  Belford,  69. 
Master  v.  Bowery  Sav.  Bank,  115. 


are  to  Pages. 

Matlock  V.  Schueuerman,  95.  96,  213, 

215,  220,  226,  228,  229.  251,  258. 
Matson  v.  Alley,  241. 
Matteson  v.  Moulton,  136. 
Mattison  v.  Marks,  69. 
Maule  V.  Crawford,  71. 
Mauney   v.   Coit,   276. 
Maxwell  v.  Agnew,  47. 
May  V.  Miller,  28. 
Mayer  v.  Heidelbach,  96. 

V.  Old,  180. 
Mayers  v.  McRimmon,  2,  166. 
Mayor  v.  Ray,  54. 
Mead  v.  Engs,  287. 

V.  Nat.  Bank  of  Pawling,  37. 
Mechanics'  Bank  v.  Barnes,  226. 

V.  Livingston,  139. 

V.  Valley  Packing  Co.,  173. 

V.  Yager,  134. 
Mechanics'  Bank  of  Canada  v.  Un- 
ion R.  &  Transp.  Co.,  47. 
Mechanics'     &     Farmers'     Bank    v. 

Wixson,  95. 
Medway     Cotton     Manufactory     v. 

Adams,  83. 
Megowan  v.  Peterson,  33. 
Mehlberg  v.  Tisher,  46,  12. 
Mehlinger  v.  Harriman,  227. 
Meise  v.  Newman,  272. 
Meldrum  v.  Henderson,  114. 
Mercantile  Bank  v.  Busby,  196,  285. 
Merchants'  Bank  v.  Birch,  289. 

v.  Easley,  284. 

V.  Woodruff,  15. 
Merchants'     Bank     of     Canada     v. 

Brown,  290. 
Merchants'  Nat.  Bank  v.  Clark,  227. 

V.  Hanson,  173,  216. 

V.  Ritzniger,  16. 
Merchants'  Nat.  Bank  of  Canada  v. 

Griswold,  151. 
Merchanf?'    ^'    Mechanics'   Bank  v. 
Hewitt,  159. 
I 


408 


TABLE  OF  CASES. 


References 

Merchants'    &    Planters'    Bank    v. 

Penland,  234. 
Merg  V.  Kaiser,  185. 
Meriden    Nat.    Bank    v.    Gallaudet, 

163,  202. 
Merriam  v.  Wolcott,  202. 
Merrill  v.  Guthrie,  179. 

V.  Hurley,  56,  57,  58. 

V.  Packer,  227. 
Merritt  v.  Todd,  255. 
Mersick  v.  Alderman,  105. 
Mersman  v.  Werges,  160,  308,  316. 
Messick  v.  Alderman,  220. 
Messmore  v.  Meyer,  102. 

V.  Morrison,  66. 
Metcalf  V.  Watkins,  213. 

V.  Yeaton,  171. 
Metler's  Adm'rs  v.  Metier,  101. 
Metropolitan    Nat.    Bank   v.    Jones, 

149. 
Meuer   v.    Phenix    Nat.    Bank,    115, 

150,  163,  195. 
Meyer  v.  Beardsley,  140. 

V.  Richards,  202. 
Michigan  Ins.  Co.  v.  Estate  of  Leav- 
enworth, 19. 
Mickles  v.  Colvin,  217. 
Middleborough  Nat.  Bank  v.  Cole, 

105. 
Middleton  v.  Griffith,  167. 
Middletown  Bank  v.  Jerome,  234. 
Miers  v.  Coates,  308. 
Miles  V.  Major,  22. 
Milins  V.  Kauffmann,  95,  97. 
Miller  v.  Cavanaugh,  108. 

V.  Crayton,  213. 

V.  Finley,  233. 

V.  Hackley,  14. 

V.  McKenzie,  95. 

V.  Ottaway,  234. 

V.  Powers,  85. 

V.  Reynolds,  32. 

V.  Talcott,  241. 
Milliken  v.  Chapman,  203. 


are  to  Pages. 

Mills  V.  American  Exp.  Co.,  180. 

Minet  v.  Gibson,  11 . 

Minnesota    Thresher     Mfg.    Co.    v. 

Heipler,  175. 
Minot  V.  Russ,  149. 
Mitchell  V.  Baldwin,  229. 

V.  Catchings,  216. 

V.  Conley,  5. 

V.  Culver,  20,  25. 

V.  Degrand,  68. 

V.  Fuller,  170. 

V.  Hyde,  81. 
Mohawk     Bank   v.    Broderick,    257, 
258. 

v.  Van  Home,  327. 
Mohlman  Co.,  J.  H.  v.  McKane,  95, 

91,  300. 
Monson  v.  Drakeley,  111. 
Montelius  v.  Charles,  118. 
Montgomery  v.  Hunt,  113. 

V.  Morris,  95. 

v.  Page,    191. 
Montgomery  &  E.   R.   Co.  v.  Tre- 
bles, 187. 
Montreal  Bank  v.  Chicago,  C.  &  W. 

R.  Co.,  48. 
Montrose  Sav.  Bank  v.  Claussen, 

221. 
Moody  V.  Threlkeld,  81. 
Moore   v.   Alexander,   67,   186,  265, 
281. 

V.  Anderson,  74. 

V.  Coffield,  264. 

V.  Hall,  175. 
Moorman  v.  Wood,  198. 
More  v.  Maddock,  104. 
Morehead    Banking     Co.    v.    More- 
head,  34. 
Morgan  v.  Bank  of  Louisville,  303. 

V.  .Edwards,  58,  87. 

V.Thompson,  104,  207,  208. 
Morrill  v.  Nightingale,  233. 

V.  Prescott,  101. 


TABLE   OF   CASES. 


409 


References 

Morris  v.  Lee,  46. 

V.  Preston,  8L 
Morrison. V.  Bailey,  15. 

V.  McCartney,  116. 

V.Smith,  171. 
Morse  v.  Massachusetts  Nat.  Bank, 

149. 
Morton  V.  Cammack,  294. 
Moses  V.  Trice,  327. 
Mosser  v.  Criswell,  243. 
Mott  V.  Havana  Nat.  Bank,  88. 
Mt.  Pleasant  Branch  of  State  Bank 

V.  McLeran,  125,  248. 
Mt.  Vernon  Bank  v.  Holden,  295. 
Mowatt  V.  McLelan,  204. 
Mulligan  v.  Smith,  93,  159. 
Mumford  v.  Weaver,  161. 
Mundlin  v.  Appelbaum,  97. 
Munroe  v.  Woodruff,  272,  286. 
Munsey  v.  Dempsey,  92. 
Murchison  Nat.  Bank  v.  Dunn  Oil 

Mills  Co.,  219. 
Murdock  v.  Mills,  152. 
Murphy  v.  Gumaer,  103,  219. 

V.  Metropolitan  Nat.  Bank,  78. 

v.  Schoch,  73. 
Murray  v.  Judah,  202. 
Muse  V.  Dautzler,  213. 
Musselman  v.  Oakes,  75. 
Musson  V.  Lake,  263,  271. 
Muzzy  V.  Knight,  113. 

N. 

Nance  v.   Lary,  237. 

Nash  V.  Brown,  262. 

Nashville  v.  First  Nat.  Bank,  42. 

National  Bank  v.  Bradley,  103,  298. 

V.  Buckwalter,  190. 

V.  Gary,  87. 
National     Bank    of    Commerce    v. 
American  Exchange  Bank, 
327. 

v.  Atkinson,  102. 

V.  Feeney,  56. 


are  to  Pages. 

National  Bank  of  Newport  v.  Sny- 
der Mfg.  Co.,  105. 

National  Bank  of  North  America  v. 
Bangs,  205. 

National  Bank  of  Rockville  v.  Sec- 
ond Nat.  Bank,  107. 

National  Bank  of  Washington  v. 
Texas,  186. 

National  Butchers'  &  Drovers'  Bank 
v.  Hubbell,  173. 

National  Citizens'  Bank  v.  Toplitz, 
335. 

National  Exchange  Bank  v.  Lester, 
311,313. 

V.  Lubrano,  196. 
National  Park  Bank  v.  German  Am. 
Mut.  W.  &  S.  Co.,  226. 

V.  Ninth  Nat.  Bank,  315. 

v.  Remsen,  226. 

V.  Saitta,  121,  133,  135,  139,  218, 
239. 

V.  Seaboard  Bank,  204. 
National  Sav.  Bank  v.  Cable,  55. 
Nebraska  Nat.  Bank  v.  Logan,  258. 
Neederer  v.  Barber,  122,  278. 
Nelson  v.  Harrington,  267. 
Nesbit  V.  Bendheim,  140. 
New  V.  Walker,  45. 
Newbold  v.  Boraef,  102. 
Newcomb  v.  Gibson,  339. 
Newcombe  v.  Fo.x,  5. 
Newhall  v.  Clark,  144. 
New  Haven  Mfg.   Co.  v.  New  Ha- 
ven Pulp  &  Board  Co.,  185,  210. 
Newman  v.  Frost,  12,  96. 

V.  Kittelle,  65. 
Newton  Wagon  Co.  v.  Dier,  51. 
New  York  African  Soc.  v.  Varick, 

83. 
Nicely  v.   Commercial   Bank,  58. 
Nichols  V.  Frothingham,  68. 

V.  Hooper,  159. 


410 


TABLE  OF  CASES. 


Nichols  &  Shepard  Co.  v.  Dedrick, 

94. 
Nicholson  v.  Chapman,  75. 
Nightingale  v.  Withington,  178. 
Nixon  V.  Zuricalday,  158. 
Noble  V.  Carey,  216. 
Noll  V.  Smith,  53,  71. 
Northampton  Bank  v.  Pepoon,  180. 
North  Atchison  Bank  v.  Garretson, 

151. 
Northfield  Nat.  Bank  v.  Arndt,  221. 
North  River  Bank  v.  Aymar,  34. 
Northumberland  Bank  v.  McMich- 

ael,  131. 
Norton  v:  Norton,  36. 
Norwich  Bank  v.  Hyde,  236. 
Noxon  V.  Smith,  72,  75. 


Oakdale   Mfg.    Co.    v.    Clarke,    160, 
186. 

Oates  V.  National  Bank,  219. 

O'Bannon  Co.,  J.  W.  v.  Curran,  265, 
304. 

Ocean  Nat.  Bank  v.  Williams,  13. 

O'Connor  v.  Kleiman,  230. 

O'Conor  v.  Clarke,  74,  241. 

Odell  V.  Clyde,  5. 
V.  Gallup,  317. 

Ogden  V.  Blydenburgh,  205. 

Ohio  Life  Ins.  &  Trust  Co.  v.  Winn, 
23. 

Olds     Wagon-Works     v.     Coombs, 
140. 

O'Neill  V.  Bradford,  49. 

Onondaga  Bank  v.  Bates,  272. 

Ontario  Bank  v.  Worthington,  133. 

Oppenheimer  v.    Farmers'    &  Mer- 
chants' Bank,  60. 

Oriental  Bank  v.  Gallo,  205. 

Ormsbee  v.  Howe,  233. 


are  to  Pages. 

Orr  V.  Hopkins,  59. 

V.    South   Amboy   Terra   Cotta 
Co.,  226. 

Orrick  v.  Carlston,  236. 

Osborn  v.  Hawley,  89. 

Osborne  &  Co.,  D.  M.  v.  Hubbard, 
43. 

Otis  V.  Cullum,  177,  202. 

Ould  V.  Myers,  95. 

Overton  v.  Hardin,  103. 
V.  Tyler,  90. 

Owen  V.  Iglandor,  144. 

Owens  V.  Snell,  166,  218. 

Oyster  &  Fish  Co.  v.  National  La- 
fayette Bank,  150. 

P. 

Pach  V.  Frink,  267. 
Packard  v.  Dunfee,  178. 

V.  Figliuolo,  223,  229. 

V.  Windholz,  104,  205,  206. 
Packner  v.  Roberts,  109. 
Padfield  v.  Green,  174. 
Page  V.  Danaher,  317. 

v.  Gilbert,  293. 

V.  Morrell,  20. 
Page's  Adm'rs  v.  Bank  of  Alexan- 
dria, 218. 
Paine  v.  Central  Vt.  R.  Co.,  216. 
Palmer  v.  Courtney,  177. 

V.  Poor,  35,  238. 

V.  Stephens,  29. 
Paramore  v.  Lindsey,  317. 
Pardee  v.  Fish,  47. 
Parker  v.  Greele,  152. 

v.  Kellogg,  263. 

v.  Plymell,  213. 

v.  Stoud,  255. 

V.  Syracuse,  52. 
Parkinson  v.  Brandenburgh,  4. 
Parks  V.  Brown,  185. 

V.Nichols,  139. 
Parmelee  v.  Williams,  191. 


TABLE  OF  CASES. 


41 


References 

Parr  v.  City  Trust,  Safe  Deposit  & 

Surety  Co.,  266. 
Parshley  v.  Heath,  305. 
Parsons  v.  Utica  Cement  Co.,  1,  72, 
230. 

V.  Utica  Cement  Mfg.  Co.,  229, 
245. 
Partridge  v.  Colby,  111. 
Pasmore  v.  North,  23. 
Pate  V.  Brown,  43. 
Patterson  v.  Poindexter,  49. 

V.Todd,  186. 
Paul  V.  Berry,  30. 
Paulman  v.  Claycomb,  323. 
Paulson  V.   Boyd,  33. 
Pavey  v.  StaufTer,  163. 
Payne  v.  Cutler,  100. 
Pearce  v.  Langfit,  295. 
Pease  v.  Landauer,  116. 

V.  Pease,  33. 
Pecquet  v.  Mager,  128. 
Peddicord  v.  Whittam,  64. 
Peirce  v.  Pendar,  294. 
Pendleton    v.    Knickerbocker    Life 

Ins.  Co.,  128. 
Pentz  V.  Stanton,  31,  33. 
People  V.  Johnston,  6. 

V.  Palmer,  8. 

V.  Supervisors,  54. 
People's  Bank  v.  Brooke,  271. 

V.  Jefiferson  County  Sav.  Bank, 
173. 

V.  Keech,  291. 
People's  Nat.  Bank  v.  Dibrell,  292. 

V.  Lutterloh,  263. 

V.  Schepflin,  5,  99,  105. 
Pepoon  V.  Stagg  &  Co.,  45. 
Pequet  v.  Dimitry,  335. 
Perley  v.  Perley,  93,  94. 
Perot  V.  Cooper,  94. 
Perry  v.  Bigelow,  87. 

V.  Bray,  323. 

V.  Friend,  285. 

V.  Harrington,  144. 


are  to  Pages. 

Perry   Co.,  J.  W.   v.  Taylor  Bros., 

197,  281. 
Peters  v.  Hobbs,  278. 
Peterson  v.  Hubbard,  145. 

V.  Stoughton  State  Bank,  58,  60. 
Pettee  v.  Prout,  232. 
Phelps  V.  Church,  168. 

V.  Sargent,  58. 
Phillips  V.  Alderson,  301. 

V.  Frost,  145. 

V.  Mercantile  Nat.  Bank,  78,  80. 

V.  Preston,  208. 
Phoenix  Bank  v.  Hussey,  13. 
Phoenix  Ins.  Co.  v.  Allen,  121. 
Pier  V.  Bullis,  323. 
Pierce  v.  Cate,  296. 

V.  Kittredge,  133. 

V.  Schraden,  292. 
Pike  V.  Irwin,  133. 
Pillans  V.  Van  Mierof,  151. 
Pillow  V.  Hardeman,  289. 
Pine  V.  Smith,  215. 
Pingree  v.  Snell,  9. 
Pixley  V.  Boynton,  94. 
Place  V.  Mcllvan,  334. 
Plankington  v.  Gorman,  333. 
Planters'  Bank  v.  Merritt,  15. 
Plato  V.  Reynolds,  128. 
Piatt  V.  Eads,  8. 
Plover   Sav.   Bank  v.    Moodie,  255, 

256,  257.  258.  259. 
Pogue  V.  Clark,  112. 
Polhemus     v.      Prudential      Realtr 

Corp.,  35. 
Police  Jury  v.  Britton,  54. 
Pollard  v.  Huflf,  102,  267. 

V.  Somerset  Mut.  Fire  Ins.  Co., 
160. 
Poorman  v.  Mills,  107,  215. 
Porter  v.  Kemball,  265,  304. 

v.  Porter,  66. 
Portsmouth   Sav.    Bank  v.    Wilson, 

199,  265,  277. 
Powell  v.  Morrison,  76,  181. 


412 


TABLE  OF  CASES. 


References  are  to  Pages. 


Power  V.  Finnic;  173. 

Prather  v.  McEvoy,  64. 

Pratt  V.  Adams,  166. 

Presbrey  v.  Thomas,  245. 

Prescott  Bank  v.  Caverly,  121,  205. 

President  of  Fitchburg  Bank  v. 
Greenwood,  176. 

President,  etc.,  of  Goshen  &  Mini- 
sink  Turnpike  Road  v.  Hurtin,  56, 
93. 

Preston  v.  Dunham,  69. 
V.  Whitney,  52. 

Prewitt  V.  Chapman,  82,  83. 

Price  V.  Hopkin,  6. 
V.  Neal,  192. 

Prichard  v.  Miller,  109. 

Proctor  V.  Baldwin,  60. 

Pulsifer  v.  Hotchkiss,  100. 

Purchase  v.  Mattison,  265,  284. 

Pursell  V.  Allemong,  IS. 

Putnam  v.  Clark,  317. 
V.  Crymes,  IT . 


Q. 


Quiggle  V.  Herman,  233. 
Quimby  v.  Meruitt,  64. 

V.  Varnum,  339. 
Quin  V.  Sterne,  28. 

R. 

Raborg  v.  Peyton,  139. 
Radcliffe  v.  Biles,  99. 
Railroad  Co.  v.  National  Bank,  97. 
Railway  Equip.  &  Pub.  Co.  v.  Lin- 
coln Nat.  Bank,  228. 
Ramsdell  v.  Soule,  328. 
Rand  v.  Pantagraph  Co.,  234. 
Ranger  v.  Cory,  216. 
Ranney  v.  Brooks,  76. 
Ransom  v.  Jones,  64. 
Ratclifif  V.  Planters'  Bank,  264. 
Rawson  v.  Davidson,  42. 


Rea  V.  McDonald,  234. 
Read  v.  Buffalo,  53. 

V.  McNulty,  58. 
Ream  v.  Merchants'  Nat.  Bank,  89. 
Reamer  v.  Bell,  169. 
Reddick  v.  Jones,  97. 
Redlich  V.  Doll,  25,  236. 
Redman  v.  Adams,  50. 
Red     River    Valley    Nat.    Bank    v. 
North  Star  Boot  &  Shoe  Co.,  97. 
Reed  v.  Cassatt,  113. 

V.  Mattapan     Deposit    &   Trust 
Co.,  25. 

V.  Nicholson,  189. 

V.  Roark,  18,  316. 

V.  Spear,  248,  281,  303. 
Regester's  Sons  Co.,  J.  v.  Reed,  229. 
Reid  v.  Morrison,  246,  285. 
Reilly  v.  Daly,  131. 
Renick  v.  Robbins,  286. 
Renshaw  v.  Wills,  Id. 
Reynolds  v.  Appleman,  293. 
Rhett  v.  Poe,  246,  265,  278,  283. 
Rhodes  v.  Lindly,  64. 

v.  Seymour,   255. 
Rhyner  v.  Feickert,  179. 
Rice  V.  Barrington,  226. 

V.  Gibbs,  158. 

V.  Grange,  96,  104. 

V.  Ragland,  12. 

V.  Ruddiman,  6. 

V.  Stearns,  169,  177. 

V.  Wesson,  255. 
Rich  V.  Starbuck,  82. 
Richards  v.  Barlow,  89. 

V.  Boiler,  271. 

v.  Warring,  165. 
Richardson  v.  Ainsworth,  159. 

V.  Carpenter,  139. 

V.  Monroe,  222. 

V.  Wren,  97. 
Richter  v.  Selin,  23. 
Ricketts  v.  Pendleton,  272. 
Rienke  v.  Wright,  262. 


TABLE   OF  CASES. 


4ia 


References 
Riley  v.  Dickens,  108. 
Risley  v.  Smith,  144. 
Ritchie  v.  Moore,  185. 
Riverside  Bank  v.  Woodhaven  Junc- 
tion Land  Co.,  93,  218. 
Rixy  V.  Pearre,  61. 
Roach  V.  Sanborn  Land  Co.,  73,  81, 
183. 

V.  Woodall,  206,  308. 
Robbins  v.  Bacon,  114. 
Roberts  v.  Hall,  97,  227. 

V.  McGrath,  35,  36. 

V.  Parrish,  175. 
Robertson  v.  Cooper,  213. 

V.  Kensington,  178. 

V.  Rowell,  102. 
Robinson  v.  Ames,  121. 

V.  Barnett,  265,  277,  303. 

V.  Gould,  95. 

V.  Gray,  144. 

V.  Lyman,  233. 

V.  Marshall,  159. 
Roch  V.  London,  276. 
Rochester  Lantern  Co.  v.  Press  Co., 

158. 
Rock  County  Nat.  Bank  v.  Hollis- 

ter,  175. 
Rockefeller  v.  Ringle,  227. 
Rockfield  v.  First  Nat.  Bank,  2,  196, 

197,  200,  201,  203,  204,  281. 
Rodriguez  v.  Merriman,  183. 
Roessler  v.  Lancaster,  196,  200. 
Rogers  v.  Durant,  15. 

V.  Gallagher,  166. 

V.  Gibbs,  199. 

V.  School  Trustees,  335. 
Roland  v.  Smith,  321. 
Rome  V.  Young,  145. 
Roseman  v.  Mahony,  98. 
Rosemond  v.  Graham,  219. 
Rosenthal  v.  Ehrlicher,  258. 

V.  Parsont,  218. 
Rosenwald  v.  Goldstein,  219. 
Ross  V.  Bedell,  284. 


are  to  Pages. 
Ross  V.  Espy,  66,  208. 

V.  Planters'  Bank,  293. 
Rosson  V.  Carroll,  67,  186,  272. 
Rounds  V.  Smith,  149. 
Rouse  V.  Wooten,  282,  336. 
Rowe  V.  Putnam,  308. 
Royal     Bank   v.    Geiman-American 

Ins.  Co.,  217. 
Rueping  Leather  Co.  v.  Watke,  18. 
Rugland  v.  Thomson,  326. 
Ruidskoff  V.  Barrett,  63. 
Russell  V.  Russell,  58. 
Rutland  v.  Brister,  96. 

V.   ]\Iendon,  9. 
Ryan  v.  First  Nat.  Bank  of  Spring- 
field, 317. 


Sabin  v.  Harris,  282. 

St.  Paul  Nat.  Bank  v.  Cannon,  326. 

St.     Paul's     Episcopal     Church     v. 
Fields,  43,  99. 

Salazar  v.  Taylor,  108. 

Salem    v.    Bank    of    State    of    New 
York,  309. 

Salisbury  v.  First  Nat.  Bank,  198. 
V.  Stewart,  60. 

Salt  Springs  Nat.  Bank  v.  Burton, 
251. 

Saluan  v.  Relf,  321. 

Sampson  v.  Fox,  327. 

San   Bernardino   Nat.   Bank  v.   An- 
derson, 33. 

Sasscer  v.  Farmers'  Bank,  293. 

Savings  Bank  v.  Fisher,  277. 

Savings  Bank  of  San  Diego  County 
V.  Central  Market  Co.,  327. 

Sawyer  v.  Brownell,  285. 

Sayers  v.  First  Nat.  Bank,  182. 

Scheuermann  v.  Monarch  ^ruit  Co., 
47. 

Schlesinger  v.  Arline,  60,  89. 
V.  Gilhooley,  234. 
V.  Schultz,  248.  256,  262. 


414 


TABLE  OF  CASES. 


References 

Schmidt  v.  Livingston,  328. 
Schmittler  v.  Simon,  50. 
Scholfield   V.    Earl    of     Londesbor- 

ough,  314. 
School  Directors  v.  Fogleman,  233. 
Schoolfield  v.  Moon,  258. 
Schwartzman  v.  Post,  325. 
Schulthers  v.  Sellers,  229. 
Scofield  V.  Ford,  314. 
Scotland  County  Bank  v.  O'Connel, 

313. 
Scott  V.  Doneghy,  209. 

V.  First  Nat.  Bank,  187. 

V.  Meeker,  245,  276. 

V.  Parker,  80. 

V.  Seelye,  239. 
Seaboard  Nat.  Bank  v.  Bank  of  Am- 
erica, 78,  79,  200,  308. 
Seabury  v.  Hungerford,  198. 
Seacord  v.  Miller,  245. 
Seattle  Shoe  Co.  v.  Packard,  31,  131, 

133,  189. 
Second  Nat.  Bank  v.  Anglin,  60. 

V.  Howe,  104. 

V.  Martin,  180,  182. 

V.  Morgan,  225. 

V.  Smith,  292,  293. 
Second  Nat.  Bank  of  Aurora  v.  Ba- 

siuer,  58. 
Secord  v.  Miller,  304. 
Seebold  v.  TatUe,  313,  315. 
Seiger  v.  Second  Nat.  Bank,  304. 
Seldner  v.  Mt.  Jackson  Nat.  Bank, 

276. 
Selikman  v.  Ten  Eyck's  Estate,  159. 
Selser  v.  Brock,  309. 
Semple  v.  Morrison,  206. 
Serle  v.  Norton,  23. 
Seymour  v.  Farquhar,  112. 
Shain  v.  Sullivan,  165. 
Shakelford  v.  Hooker,  146. 
Shank  v.  Butsch,  29. 
213,  214,  215,  216,  217,  219,  229. 


are  to  Pages. 
Shaver  v.  Western  Union  Tel.  Co., 

50,  152. 
Shaw  V.  McNeill,  269,  277. 

V.  Reed,  263. 
Shed  V.  Brett,  246. 
Sheehan  v.  Crosby,  35. 
Shelburne      Falls      Nat.      Bank     v. 

Townsley,  298. 
Sheldon  v.  Benham,  287,  294. 
Shelton  v.  Bruce,  49. 
Shelton  Implement  Co.  v.  Schieck, 

96. 
Shenandoah    Nat.    Bank   v.    Marsh, 

60. 
Shenandoah  Val.   R.   Co.  v.   Miller, 

114. 
Shepard  v.  Citizens'  Ins.  Co.,  302. 
V.  Hall,  294. 
V.  Hawley,  291. 
Shepherd  v.  Chamberlain,  251. 
Sherman  v.  Ecker,  270. 
V.  Goodwin,  73,  74. 
Sherrill  v.  Weisinger  Clothing  Co., 

181. 
Sherrod  v.  Rhodes,  284. 
Shipman  v.  Bank  of  State  of  New 

York,  78,  80. 
Shirk  V.   Mitchell,  229. 
Shoemaker  v.  Mechanics'  Bank,  298. 
Short  V.  Blount,  133,  136. 
Shroeder  v.  Webster,  318. 
Shufeldt  V.  Gillilau,  159. 
Shutts  V.  Fingar,  333. 
Siegel    V.    Chicago    Trust     &     Sav. 
Bank,  52. 
V.  Oehl,  216,  217,  222,  227,  231. 
Sieger  v.  Second  Nat.  Bank,  265. 
Simms  v.  Larkin,  301. 
Simpson  v.  Davis,  317. 
Sims  v.  Hundley,  272. 
Sinclair  v.  Piercy,  159. 
Singer    Mfg.    Co.    v.    Summers,    12, 
Singer  v.  Stimpson,  64. 
I  Sharpe  v.  Drew,  125. 


TABLE   OF   CASES. 


415 


References 

Slack  V.  Kirk,  209. 

V.  LongshaAv,  298. 
Slade  V.  Halstead,  99. 
Smilie  v.  Stevens,  49. 
Smith  V.  Allen,  46. 

V.  Bayer,  160,  173,  175. 

V.  Brooklyn   Sav.    Bank,  48. 

V.  Caro,  67. 

V.  Crane,  56. 

V.  Cromer,  245. 

V.  Erwin,  334. 

V.  Essex  County  Bank,  326. 

V.  Godlett,  108. 

V.  Hill,  294. 

V.  Hubbard,  158. 

V.  Janes,  121. 

V.  Jansen,  240. 

V.  Marland,  57. 

V.  Miller,  258,  281. 

V.  Poillon,  298. 

V.  Robinson,  85. 

V.  Smith,  108. 
Smith's  Ex'rs  v.  Wyckoff,  104. 
Smitheers  v.  Junker,  65. 
Sneed  v.   Sabinal  Min.   &  Mill.   Co., 

318. 
Snoddy  v.  American  Nat.  Bank,  233. 
Snyder  v.   Corn   Exch.   Nat.    Bank, 
78,  80. 

V.  Van  Doren,  236. 
Somers  v.  Thayer,  144. 
South    Bend    Iron   Works   v.    Pad- 
dock, 88. 
Southerland  v.  Fremont,  267. 

V.  Whitaker,  99. 
Southwark  Bank  v.  Gross,  316. 
Spann  v.  Baltzell,  262,  293. 
Sparran  v.  Neeley,  19. 
Spaulding  v.  Andrews,  133,  147. 
Spear  v.  Pratt,  134. 
Specht  V.  Berndorf,  112. 
Speelman  v.  Culbertson,  181. 
Spencer  v.  Alki  Point  Transp.  Co., 
111. 

V.  Carstarphen,  167. 


are  to  Pages. 

'  Spense  v.  Tapscott,  43. 
Sperry  v.  Horr,  61. 
Spies  V.  National  City  ij'ank,  333. 
Springfield  Marine  &  Fire  Ins.  Co. 

V.  Peck,  116. 
Spurgeon  v.  Swain,  133. 
Stadler  v.  First  Nat.  Bank,  60. 
Stafford  v.  Yates,  286. 
Stainback  v.  Bank  of  Virginia,  124, 

125. 
Stall  V.  Catskill  Bank,  103. 
Stanley  v.  McElrath,  265,  303. 
Stanton  v.  Blossom,  286. 

V.  Caffee,  109. 

V.  Shipley,  53. 
Stapleton  v.  Louisville  Banking 

Co.,  60. 
Star  Fire  Ins.   Co.  v.   New   Hamp- 
shire Nat.  Bank,  192. 
Stark  V.  Olson,  58. 
State  V.  Carpenting,  63. 

V.  Cook,  54. 

V.  Corning  State  Sav.  Bank,  177, 
180,   205,  206,   308. 

V.  Harris,  9. 
State  Bank  v.  Clark,  139. 

V.  Slaughter,  291. 

V.  Weiss,  138. 

v.  Wilson,  335. 
State  Bank  of  Gothenburg  v.  Car- 
roll, 257. 
State  Bank  &  Trust  Co.  v.  Evans, 

180. 
State   of   New   York   Nat.   Bank   v. 

Coykendall,  333. 
Steadwell  v.  Monis,  233. 
Stein  v.  Passmore,  198. 

V.  Rheinstrom,  213. 

v.  Steindler,  334. 
Steiner  v.  JeflFries,  244. 
Steman  v.  Harrison,  151. 
Stephens  v.  Olson,  227. 
Sterling  v.   Marietta   &  S.  Trading 

Co.,  327. 
Sterry  v.  Robinson,  128. 


416 


TABLE  OF  CASES. 


References 
Stevens  v.  Blunt,  71. 

V.  Brice,  216. 

V.  Hannan,  321,  325,  338. 

V.  Johnson,  88. 
Stewart  v.  First  Nat.  Bank,  311. 

V.  French,  66. 

V.  Orvis,  203. 

V.Wilson,  159. 
Stillwell  V.  Patton,  317. 
Stockbridge  v.  Damon,  215. 
Stouffer  v.  Curtis,  35,  74. 
Stronach  v.  Bledsoe,  94. 
Stultz  v.  Silva,  71. 
Sturges  V.  Williams,  316. 
Sublette  v.  Brewington,  162. 
Sully  V.  Goldsmith,  240. 
Summers  v.  Barrett,  267. 
Susquehanna  Val.  Bank  v.  Loomis, 

285. 
Sussex   Bank  v.   Baldwin,  246,  247, 

272,  292,  298. 
Sutherland  v.  First  Nat.  Bank,  326. 

V.  Mead,  98. 
Swan  V.  Hodges,  251. 
Swayze  v.  Britton,  286. 
Sweeney  v.  Thuckstun,  89. 
Sweet  V.  Garwood,  185. 

V.Swift,  118. 
Swem  V.  Newell,  321. 
Swift,  In  re,  285. 
Swift  V.  Tyson,  97,  219. 
Swiney  v.  Edwards,  233,  239. 
Swope  V.  Ross,  233. 
Sykes  v.  LafTerry,  95. 
Sylvester  v.  Crohan,  252. 


Taber  v.  Cannon,  194. 

Taddiken  v.  Cantrell,  311. 

Talbot    V.    National    Bank     of    the 

Commonwealth,  263. 
Tassey  v.  Church,  34. 
Tatam  v.  Haslar,  231. 


are  to  Pages. 
Tatlock  V.  Harris,  77. 
Taylor  v.  Curry,  52. 

V.  Dobbins,  28. 
Terry  v.  Allis,  163,  308. 
Thackaray  v.  Hanson,  72. 
Thayer  v.  Daniels,  159. 
Third  Nat.  Bank  v.  Armstrong,  88. 

V.  Butler  Colliery  Co.,  181. 

V.  Clark,  165. 

V.  Lange,  75. 
Third    Nat.     Bank    of    Buffalo    v. 

Spring,  88. 
Thompson  v.   Gaylord,  64. 

V.  Hoagland,  109. 

V.  McCullough,  202. 

V.  Perrine,  74. 

V.  Rathbun,  25. 

V.  Sioux  Falls  Nat.  Bank,  222. 

V.  Sloan,  64. 
Thomson  v.  Bank  of  British  North 

America,  150. 
Thornburg  v.  Emmons,  296. 
Thorp    V.    Mindeman,    58,    71,    168, 

176. 
Thorpe  v.  White,  196,  312. 
Thurston  v.  McKown,  216. 
Tibbets  v.  Gerrish,  64. 
Ticonic  Bank  v.  Stackpole,  13. 
Tilley  v.  Hanell,  9. 
Tillman  v.  Ailles,  197. 
Times    Square    Automobile    Co.    v. 

Rutherford  Nat.  Bank,  149,  150. 
Tindal  v.  Brown,  292. 
Title  Guarantee  &  Trust  Co.  v.  Ha- 
ven, 192,  193. 
Tittle  V.  Thomas,  81. 
Todd  V.  Shelbourne,  240. 
Tolman    v.    American    Nat.    Bank, 
308. 

V.  Janson,  89. 
Tomlinson  Carriage  Co.  v.  Kinsella, 

216. 
Toole  V.  Crafts,  196.  2^7    ■• 
Torbert  v.  Montague,  172,  265,  303, 


TABLE  OF  CASES. 


417 


References 
Torpey  v.  Tebo,  68. 
Tourtelot  v.  Reed,  104,  221. 
Towles  V.  Williams,  21. 
Towne  v.  Rice,  56,  87. 
Townsend  v.  Auld,  269,  295. 

V.  Chas.   H.   Heer    Dry    Goods 

Co.,  262. 
V.  Lorain  Bank,  270,  271. 
Townsley  v.  Sumrall,  118,  140. 
Traders'  Bank  v.  Alsop,  239. 
Traders'    Deposit    Bank    v.    Chiles, 

166. 
Traders'  Nat.  Bank  v.  Jones,  286. 
V.  Rogers,  309. 
V.  Smith,  113. 
Tradesmen's    Nat.    Bank   of   Phila- 
delphia V.  Green,  52. 
Tredwell  v.  Blount,  229. 
Trent  Tile  Co.  v.  Ft.  Dearborn  Nat. 

Bank,  132. 
Trimble  v.  City  Nat.  Bank,  191. 
Troy  City  Bank  v.  Louman,  316. 
Trust  Co.  of  America  v.  Hamilton 

Bank,  80. 
Tucker  v.  Welsh,  193. 
Tufts  V.  Shepherd,  104. 
Tuley  V.  McClung,  61. 
Tunno  v.  Lague,  305. 
TurnbuU  v.  Bowyer,  205. 
Turner  v.  Browder,  321. 

V.  Peoria  &  S.  R.  Co.,  47. 
Twelfth  Ward  Bank  v.  Brooks,  320. 
Tyler  v.  Young,  67. 


U. 


Ulrich  V.  Howner,  134. 

Ulster   County   Bank  v.   McFarlan, 

152. 
Union  Bank  v.  Ezell,  255. 

V.  Grimshaw,  288. 

V.  Holcomb,  274. 

V.  Hyde,  269,  277. 

V.  Ridgely,  43 


are  to  Pages. 
Union  Bank  v.  Shea,  151. 

V.  Willis,  198. 
Union  Ins.  Co.  v.  Greenleaf,  52. 
Union  Nat.  Bank  v.  Brown,  233. 
V.  Cooley,  335. 
V.  Grant,  333. 
V.  Roberts,  316. 
Union    Square    Bank    v.    Helerson, 

227. 
Union  Stock  Yards  Nat.  Bank  v. 

Bolan,  1,  2,  68. 
Union   Trust  Co.  v.  Chicago   &  L. 

H.  R.  Co.,  48. 
United    States    v.    American    Exch. 
Nat.  Bank,  204. 
V.  Barker,  278. 
V.  Read,  159. 
V.  White,  82. 
United     States     Bank    v.    Bank    of 

Georgia,  192,  310. 
United  States  Nat.  Bank  v.  McNair, 

233,  240. 
University  Press  v.  Williams,  5. 


Vagliona  Bros.  v.  Bank  of  England, 

n. 

Valle  V.  Cerre,  151. 

Valley  Nat.  Bank  of  Chambersburg 
V.  Crowell,  87. 

Valley  Sav.  Bank  v.  Mercer,  225. 

Van  Allen  v.  American  Nat.  Bank, 
116. 

Van  Buskirk  v.  Day,  56. 

V.  State  Bank,  115,  118,  131,  134, 
148,  149. 

Vanderford  v.  Farmers'  &  Mechan- 
ics' Nat.  Bank,  320,  333,  336. 

Vander  Ploeg  v.  Van  Zuuk,  2,  196, 
214,  236,  237. 

Van  Duser  v.  Howe,  236. 

Van  Hoesen  v.  Van  Alstyne,  66. 


Opp.— Sel. — 27 


418 


TABLE  OF  CASES. 


References 

Van  Norden  Trust  Co.  v.  Rosen- 
berg, 95. 

Vanstrum  v.  Liliengren,  134,  145. 

Van  Zandt  v.  Hopkins,  49,  112. 

Varley  v.  Title  Guarantee  &  Trust 
Co.,  199. 

Vawter  v.  Griffin,  327. 

Verder's  Ex'r  v.  Verder,  255. 

Vere  v.  Lewis,  11 . 

Virginia  v.  Turner,  53. 

Visher  v.  Webster,  313. 

Vliet  V.  Simanton,  34. 

Vogel  V.  Starr,  287,  294.  301,  303. 

Voreis  v.  Nussbaum,  233. 

Voss  V.  Chamberlain,  95,  97,  162, 
172,  197,  220,  230. 

W. 

Wachusett  Nat.  Bank  v.  Fairbroth- 

er,  301. 
Wade  V.  Withington,  315. 
Wadhams  v.  Portland,  V.  &  Y.  R. 

Co.,  133. 
Wagner  v.  Winter,  159. 
Walker  v.    Bank   of  State   of   New 
York,  194. 

V.  Dunham,  5,  196. 

V.Thompson,  11,  62. 

V.  Woollen,  53,  57,  71. 
Wallabout  Bank  v.  Peyton,  221  . 
Wallace  v.  Agry,  121,  122,  128. 

V.  Douglas,  144. 

V.  McConnell,  145. 

V.  Tice,  315. 
Wallach  v.  Bader,  215. 
Walmsley  v.  Acton,  292. 
Walsh  V.  Blatchley,  121,  127,  184. 

V.  Hunt,  313,  315. 
Walters  v.  Brown,  298. 

V.  Munroe,  309. 
Walton  V.  Mandeville,  133. 

V.  Williams,  196. 
Wamsley  v.  Darragh,  243. 


are  to  Pages. 
Ward  V.  Cheney,  317. 

V.  City  Trust  Co.,  216,  217,  230. 

V.  Johnson,  224. 

V.  Lattimer,  63. 

V.  Smith,  173,  326. 

V.  Sugg,  239. 
Wardens,  etc.,  of  St.  James  Church 

V.  Moore,  110. 
Waring  v.  Betts,  264. 
Warren  v.  Briscoe,  262. 

V.  Gillman,  299. 
Washburn  v.  Picot,  99,  100. 
Washington   County  Mut.   Ins.  Co. 

V.  Miller,  56. 
Waters  v.  Carleton,  49. 
Watervliet  Bank  v.  White,  170,  182. 
Watkins  v.  Bowers,  Zl . 
W^trous  V.  Halbrook,  83. 
Watson  V.  Chesire,  177. 
Way  V.  Butterworth,  183. 

V.  Dunham,  334. 

V.  Lamb,  233. 

V.  Towle,  15. 
Wayland    University    v.    Boorman, 

229. 
Wayman  v.  Torreyson,  82. 
Wedge   Mines   Co.  v.   Denver  Nat. 

Bank,  15,  81,  225,  228. 
Weeks  v.  Esler,  42. 
Weems  v.  Parker,  68. 
Weidman  v.  Symes,  236,  313. 
Weil  V.  Corn  Exchange  Bank,  304. 
Weinstock  v.  Bellwood,  131. 
Weiss  V.  Rieser,  99,  216,  240. 
Weld  V.  Eliot  Five  Cent  Sav.  Bank, 

19. 
Wellington  v.  Jackson,  309. 
Wells  V.  Western  Union  Tel.   Co., 

149. 
Wells,  Fargo  &  Co.  v.  Vansickle,  35. 
Westberg   v.    Chicago     Lumber     & 

Coal  Co.,  4,  72,  137. 
Western  Brass  Mfg.  Co.  v.  Maver- 
ick, 327. 


TABLE   OF   CASES. 


419 


References 

Westfall  V.  Farwell,  295. 

West  London  Commercial  Bank  v. 

Kitson,  194. 
Westminster  Bank  v.  Wlieaton,  15. 
Westphal  v.  Nevills,  96. 
Weyerhauser  v.  Dun,  25. 
Whaley  v.  Houston,  124,  125. 
Wheatley  v.   StroLe,  46. 
Wheeler  v.  Guild,  159,  222. 

V.  Webster,  134. 

V.  Whann  Co.,  158. 
Whilden  v.  Merchants'  &  Planters' 

Nat.  Bank,  120. 
Whistler  v.  Forster,  163. 
White    V.    Continental    Nat.    Bank, 
192. 

V.  Cushing,  48. 

V.  Davis,  94. 

V.  Fisher,  325. 

V.  Keith,  270. 

V.  Low,  245. 

V.  National  Bank,  173. 

V.  Savage,  104,  221, 

V.  Smith,  56. 

V.  Thompson,  34. 
Whiteside  v.  First  Nat.  Bank,  219, 

222. 
Whitney  v.  Clary,  94. 

V.  Eliot  Nat.  Bank,  114. 

V.  Inhabitants  of  Stow,  34. 
Whittier  v.  Collins,  304. 

V.  Eager,  104. 
Whitwell  V.  Brigham,  321. 

v.  Johnson,  263. 

V.  Winslow,  56. 
Whitworth  v.  Adams,  104. 
Wilkie  v.  Chandon,  97,  277. 
Wilkins  v.  McGuire,  243. 
Wilkinson  v.  Sargent,  323. 
Willard  v.  Nelson,  223. 
Willets  V.  Phoenix  Bank,  80,  194. 
Williams  v.  Baker,  83. 

V.  Bank  of  United   States,  264, 
301. 


are  to  Pages. 

Williams  v.  Banks,  104, 

V.  Cheney,   234. 

V.  Holt,  210. 

v.  Merchants'   Bank,  207. 

V.  Smith,  208. 

v.  Theodore,    193. 

V.  Winans,  151. 
Williams'  Ex'rs  v.  Williams,  23. 
Willis  v.  Green,  291. 

V.  Heath,  190. 

V.  Hobson,  332. 
Willison  V.   Smith,   180. 
Willoughby  v.   Moulton,  29. 
Wills  V.  Wilson,  316. 
Wilson  V.  Campbell,  57. 

V.  Denton,  96. 

V.  Hendee,   196,  200,  207,  208. 

V.  Law,  310. 

V.  Senier,  247,  259,   304. 

V.  Tolson,   175. 

V.  Wilson,  94. 
Wilson   Sewing   Mach.    Co.  v.   Mo- 
reno, 60. 
Windham  Bank  v.  Norton,  259. 
Windsor   Sav.    Bank   v.    McMahon, 

58. 
Winkelman  v.  Choteau,  216. 
Winn  v.  Alden,  293. 
Winship  v.   Merchants'   Nat.  Bank, 

98,  220. 
Winter  v.  Pool,  25. 
Wintermute  v.  Post,  144. 
Wirt  V.  Stubblefield,  8,  9,  233. 
Wisconsin  Yearly  Meeting  of  Free- 
will Baptists  V.  Bahle,  89. 
Wiseman  v.   Chiappella,  124,  125. 
Wisner  v.  First  Nat.  Bank,  138,  269. 
Wistrand  v.  Parker,  62. 
Witte  V.  Vincenot,  48. 
Wittey  V.  Michigan  Mut.  Life  Ins. 

Co.,   108. 
Wittich  V.  First  Nat.  Bank,  269. 
Wittkowski  v.  Smith.  263. 
W.  O'Bannon  Co.  v.  Curran,  304. 


420 


TABLE  OF  CASES. 


References 

Wolfe  V.  Jewett,  123. 

V.  Tyler,  63. 
Wolford  V.  Andrews,  270. 
Wolstenholme   v.    Smith,    104,    320, 

324. 
Wood  V.  Callaghan,  295. 

V.  Oakley,  8. 

V.  Ridgeville  College,   113. 

V.  Starling,  241. 

V.  Wood,  74. 
Woodbridge  v.  Skinner,  328. 
Woodbury  v.  Roberts,  69. 
Woodford  v.  Dorwin,  5. 
Wood    River     Bank    v.    First    Nat. 

Bank,  269. 
Woodrufif  V.  Hensel,  131. 

V.  Munroe,  310. 

V.  Plant,  257,  258. 
Woodward  v.  Severance,  209. 

V.  Smith,  53. 
Woolen   V.   Ulrich,  314. 
Wooley  V.  Cobb,  97. 

V.  Sergeant,  46. 
Worden   v.   Mitchell,  304. 
Workman  v.  Wright,  309. 
Worth  V.  Case,  36. 
Wright  V.  Hart,  63. 


are  to  Pages. 

Wright  v.  Irwin,  56. 

V.  McFall,  148. 

V.  Smith,  35. 

V.  Traver,  88. 
W.  W.  Kimball   Co.  v.  Mellon,  57, 

88. 
Wyman  v.  Fiske,  94. 

V.  Yeomans,  315. 
Wynen  v.  Schavert,  295. 


Y. 


Yellow    Medicine    County    Bank   v. 

Tagley,  234. 
Yingling  v.  Kohlhass,  71. 
Young  V.  Bennett,  13. 

V.  Kelly,  160. 
Younglove  v.  Cunningham,  94. 


Z. 


Ziegfried  v.  Stein,  334. 
Zimbleman  v.  Finnegan,  92, 
Zimmerman  v.  Adee,  36. 

V.  Anderson,  90. 

v.  Rote,  19,  314. 
ZoUner  v.  Moffitt,  272,  293,  294,  295. 


INDEX. 


A. 

References  are  to  Pagpg. 

ABBREVIATION,  of  maker's  name  is  sufficient  signature,  29. 

ABSCONDING  DRAWEE,  presentment  for  acceptance  excused,  .119. 

ABSENCE,  of  drawee  not  a  refusal  to  accept,  125. 

ACCEPTANCE,  nature  and  form,  131. 
definition,   16. 

in  writing  signed  by  drawee,  132. 
revocation,  131. 

on  face  of  bill  or  on  separate  instrument,  134. 
necessary  to  charge  drawee,  130. 
consideration  for,  139. 

not  necessary  to  holder  taking  for  value  before  acceptance,  218. 
promise  to  accept  is  equivalent  to,  150. 
before  bill  is  drawn,  ISO. 
within  24  hours  after  presentment,  135,  140. 
implied,  135. 

of  incomplete,  overdue  or  dishonored  bill,  146. 
general,  unqualified,   142. 
to  pay  at  particular  place  is  general,  145. 
qualified,  143. 
conditional,  143. 
waiver  of  conditions  in,   144. 
certification  of  checks,  148. 

in  blank,  liability  of  acceptor  to  bona  fide  holder,  235. 
for  honor,  153-156. 

when  permissible,  153. 

must  be  in  writing,  154. 

construction  of,  154. 

liabilities  of  acceptor  for  honor,  154,  155. 

maturity  of  bill  payable  after  sight,  156. 
bill  payable  five  days  after  sight  is  payable  five  days  after  acceptance, 

68. 
knowledge  of  acceptor  that  payee  was  fictitious,  71 . 
instruments  accepted  when   overdue  are  payable  on  demand,  146. 
presentment  for,  117-129. 

421 


422  INDEX. 

References  are  to 

ACCEPTANCE  (continued)— 

acceptor  not  entitled  to  presentment  for  payment,  244. 

absence  of  drawee  not  a  refusal  to  accept,  125. 

dishonor  by  nonacceptance,  127. 

protest  for  nonacceptance,  270. 

acceptor  insolvent,  protest  before  maturity,  274. 

liability  of  acceptor,   191. 

acceptor  is  primarily  liable,  244. 

of  several  parts  of  bill  in  a  set,  126,  147. 

three  days  of  grace  on  acceptance,  in  North  Carolina,  253. 

action  against  acceptor  on  last  day  of  grace  is  premature,  253. 

acceptor  negotiating  bill  is  estopped  to  set  up  payment,  321. 

acceptor  not  discharged  by  failure  of  holder  to  sue  drawer,  193. 

ACCEPTOR.     See  Acceptance. 
ACCOMMODATION    PAPER,   defined,    101-105. 

discount    procured    by    maker    is    notice    that    indorsement    was    for 

accommodation,  226. 
authority  of  holder  to  insert  date  on,  20. 
acceptance  for  accommodation,  140. 
acceptor  as  surety,  104. 

right  of  drawer  to  notice  of  dishonor,  281. 
presentment    for    payment    not    necessary    to    charge    drawer   or   in- 
dorser   of   instrument    made    or   accepted    for    his    accommodation, 
245,  246. 
accommodation  drawer  entitled  to  notice,  284. 
accommodation  indorser  entitled  to  notice,  285. 
payee   cannot    recover   ajra-nsL    accommodation    maker,    103,    104. 
third  person  signing  in  blank  before  delivery  for  accommodation   of 

payee  is  liable  to  all  parties  subsequent  to  payee,   198-201. 
signer  for  accommodation  is  liable  to  bona  fide  holder  with  know- 
ledge of  nature  of  paper,  104,  105. 
payment  by  party  accommodated  discharges  instrument,  320. 
reissuance,  339. 
contribution  between  accommodation  indorsers  on  payment  by  one, 

339. 
indorser  held  not  discharged  by  delay  in  presentment  for  acceptance, 

120-122. 
parol  evidence  to  show  character,  102. 
ACCOUNT,  reference  to  particular  account  for  reimbursement  does  not 
destroy  negotiability,  50. 
indorsements  for,  restrictive,  172. 
as  payment,  326. 


INDEX.  423 

Referencps  are  to  Pages. 
ACKNOWLEDGMENT,  not  a  sufficient  promise  to  pay,  45. 
ACT,  title  of  negotiable  instrument  law,  3. 
title  sufficient,  constitutionality,  3. 

ACT  OF  GOD,  bad  weather  as  excuse  for  delay  in  presenting  for  pay- 
ment, 259. 

ACTION,  definition,  16. 

against  acceptor  on  last  day  of  grace  is  premature,  253. 

by  restrictive  indorsee,  174. 

by  transferee  in  own  name,   160. 

ADMINISTRATORS,  personal  liability  on  negotiable  paper,  33. 

ADMISSION,  of  genuineness  of  forged   signature,  307-310. 

ADOPTION,  of  forged  or  unauthorized  signature,  307-310. 

AFTER    SIGHT,   instruments    payable   at    fixed    period    after    sight   are 
certain  as  to  time,  67. 
bills  payable  after  sight  must  be  presented  for  acceptance,  117. 

AGENCY,  created  by  delivery  of  instrument  signed  in  blank,  235-238. 

signature  by  agent,  30. 

signature  by  "procuration,"  34. 

liability  of,  31. 

notice  to  agent  as  notice  to  principal,  227. 

for  presentment  for  acceptance,  124,  125. 
for  payment,  246,  247. 

acceptance  in  representative  capacity,  194. 

to  give  notice  of  dishonor,  286-287. 

to  receive  notice  of  dishonor,  289. 

indorsement  by  agent,  ISO. 

indorsement  creating  is  restrictive,  172. 

restrictive  indorsement  followed   by  unqualified  indorsement  by  in- 
dorsee renders  latter  liable  as  general  indorser,  204. 

negotiation  by  agent  without  indorsement,  209,  210. 

undisclosed,    liability    of    agent    negotiating    without    indorsement, 
209,  210. 

personal  liability  as  affected  by  manner  of  signing,  31-34. 

ALLONGE,  indorsement  on,  165. 

ALTERATION  OF  INSTRUMENTS,  holder  has  prima  facie  authority 
to  fill  blanks,  24-27. 
materiality  and  effect,  312-317. 

ALTERNATIVE,  instruments  payable  in   money  or  goods,  not   •aego- 
tiable,  64. 


424  INDEX. 

References  are  to  Pages. 

ALTERNATION  (continued)— 

instruments  payable  to  one  or  some  of  several  payees,  negotiable,  84. 
bill  cannot  be  addressed  to  two  or  more  drawees  in  alternative,  84. 
provision  for  sale  of  collaterals  in  alternative  destroys  negotiability, 

87. 
provision  in  note  for  maturing  whole  debt  on  default  of  instalment, 

57. 
AMBIGUITY,  ambiguous  instrument   may  be  treated  either  as  bill   or 

note,  110. 
words  control  figures,  107. 

AMOUNT  PAYABLE,  holder  may  fill  blank,  25. 

bona  fide  holder,  235-237. 
instrument  signed  and  delivered  in  blank  may  be  filled  up  for  any 

amount,  25. 
certainty,  54-62. 
provision  for  interest,  55. 

certain,  though  payable  with  exchange  or  attorneys'  fees,  59-61. 
may  be  payable  in  instalments,  56. 
rendered  uncertain  by  alternative  provision  for  sale  of  collaterals,  87. 

by  provision  for  discount  if  payment  is  made  before  maturity,  56. 

provision  for  payment  of  taxes,  62. 
words  control  figures,  107. 
acceptance  to  pay  only  part  is  qualified,  143. 
indorsement  must  be  of  entire  sum,  167. 
change  of  is  material  alteration,  315. 
holder  in  due  course  may  recover  full  amount,  238. 
mistake  in  notice  of  dishonor,  293. 

ANOMALOUS  INDORSERS,  198. 

ANTECEDENT    DEBT,    sufficient    consideration    for    negotiable    in- 
strument, 96. 
consideration  for  acceptance,  139. 
for  indorsement  or  transfer,  166. 

ANTECEDENT  PARTIES,  time  of  giving  notice  of  dishonor  to,  298. 

ANTEDATING,  does  not  afifect  validity,  23. 

holder  cannot  antedate,  20. 
APPLICATION,  of  negotiable  instruments  laws   to   negotiable   instru- 
ments only,  3. 

no  retroactive  efifect,  4. 
APPRAISEMENT  LAWS,  negotiability  not  destroyed  by  provision  for 
waiver  of  benefits,  89. 

ASSENT,  of  drawee  by  acceptance,  131,  132. 

of  drawer  or  indorser  to  qualified  acceptance,  131,  132. 


INDEX.  425 

References  are  to  Pages. 

ASSIGNMENT,  "assignability"  and  "negotiability"  distinguished,  158. 

contracts  capable  of,  158. 

of  part  of  sum  payable,  not  a  negotiation,   167. 

of  negotiable  instrument,  consideration  presumed,  161. 

of  bank  pass-book,  48. 

bill  does  not  operate  as  assignment  of  funds,  113. 

when  drawn  on  particular  fund  does,  114. 

checks  do  not  operate  as,  115. 

of  funds  by  drawee,  cannot  be  shown  after  acceptance,  193. 

to  joint  maker  extinguishes  instrument,  325. 

by  drawee,  presentment  for  acceptance  may  be  made  to  drawee  or 
assignee,  126. 
ASSUMED  NAME,  as  signature,  29. 

AT  SIGHT,  instruments  so  payable  are  payable  on  demand,  65. 
bills  payable  at  sight  must  be  presented  for  acceptance,  117. 
three  days  of  grace  on  sight  drafts  in  certain  states,  253. 

ATTESTATION,  of  payment  for  honor,  330. 

of  protest  need  not    made  by  notary,  272,  273. 

ATTORNEYS'  FEES,  provision  for  payment  of,  does  not  destroy  nego- 
tiability, 59. 

AUTHORITY,  to  fill  blanks,  23-27. 
of  agent  to  sign,  30. 

of  municipal  officers  to  execute  negotiable  instruments,  53. 
to  indorse  in  representative  capacity,  181. 

B. 

BANK,  definition  of,  16. 

check  always  drawn  on,  14. 

cannot  presume  that  check  was  issued  for  value,  93. 
not  liable  on  check  until  acceptance  or  certification,  148. 
estoppel  by  certification  of  check,  148. 

as  indorsee  for  collection,  on  subsequently  indorsing  without  qualifi- 
cation, is  liable  as  general  indorser,  204. 
indorsement  by  or  to  cashier,  181. 
savings  bank  sued  on  draft  claimed  by  third  person  cannot  deposit 

amount  in  court  pending  suit,  115. 
discounting  paper  as  purchaser  for  value,  221,  222. 
instrument  payable  at,  85. 

time  of  presentment  for  payment,  249. 
payment  by  or  to  bank,  325. 

BANK  BOOKS,  not  negotiable,  48. 


4261  INDEX. 

References  are  to  Pages. 
BANK  NOTES,  instruments   payable   in   negotiability,   63. 

BANKRUPTCY,  notice  of  dishonor  may  be  given  to  assignee  or  trustee, 
291. 
presentment  for  acceptance,  affected  by,  126. 
BEARER,  definition,  16. 

instrument  must  be  payable  to  order  or  bearer,  71,  72. 

what  instuments  payable  to,  76,  81. 

instruments  expressly  so  payable,  76. 

instruments   payable   to   order    of   fictitious   or   nonexistent   persons, 

77-80. 
instruments  in  which  payee  is  not  a  person,  80. 
instruments  indorsed  in  blank,  81. 

instrument  payable  to  order  of  maker  is  not  payable  to  bearer,  73. 
paper  is  negotiable  by  delivery,  163. 

if  specially  indorsed,  170. 
third  person  signing  bearer  paper  in  blank  before  delivery  is  liable 
to  all  parties  subsequent  to  maker  or  drawer,  198-201. 

BILL,  definition,  16. 

BILL  OF  EXCHANGE,  definition,  11 
designation  as  draft,  12. 
means  negotiable  bill,  3. 
within  law  merchant,  7. 
several  drawees,  12. 
inland  and  foreign,  13. 
check  as  inland  bill,  16. 

inserting  name  of  referee  in  case  of  need,  128. 
sufficiency  of  order  in  bill,  45. 
must  be  payable  to  "order"  or  to  "bearer,"  71. 
negotiability   of    order   with    provision    to    charge    to    "my   account" 

under  certain  contract,  55. 
as  consideration  for  note,  96. 
checks  as  consideration  for,  96. 
bill  in  a  set,  14. 

presentment  for  acceptance,  126. 

acceptance,  147. 

negotiation,  184. 
construction  of  instrument,  covenant  or  bill  of  exchange,  45,  46. 
instrument  held  not  to  promise  anything  in  addition  to  payment  of 

money,  91. 
instrument  held  to  be  good  bill,  though  blank  as  to  name  of  payee,  82. 
as  promissory  note,  110. 
not  an  assignment  of  funds,  113. 


INDEX.         •  427 

References  are  to  Pages. 
BILLS  OF  EXCHANGE  (continued)— 
presentment   for  acceptance,   117-129. 
acceptance,  130-152. 

before  signed  by  drawer,  146. 

for  honor,  153-156. 

varying  eflfect  of  bill  is  qualified,  143. 
description  in  promise  to  accept,  150. 
presentment  for  payment,  242. 

three  days  of  grace  on  sight  drafts  in  some  states,  253. 
payable  five  days  after  sight  is  payable  five  days  after  acceptance,  68. 
protest,  268-281. 
payment  for  honor,  329-332. 
as  payment,  326-328. 

BILLS  OF  EXCHANGE,  ACT  1882,  repeal  of  statute  3  and  4  Anne, 
c.  9,  §  1,  7. 

BILLS  OF  LADING,  negotiability,  46. 

BILLS  PAYABLE,  instruments  payable  to,  are  payable  to  bearer,  80. 

BLANKS,  holder  has  prima  facie  authority  to  fill,  19-27. 
delivery  essential,  24. 

holder  may  fill  in  date  of  acceptance,  141. 
instruments  signed  and  delivered  in  blank,  25. 

rights  of  bona  fide  holders,  26. 
for  name  of  payee,  certainty  in  designation  of  payee,  82,  83. 
signature  in  blank  by  third  person,  before  delivery,  198. 
indorsement  in  blank,  171. 

may  be  made  special,  170. 

may  be  filled  by  holder,  24. 

instrument  is  payable  to  bearer,  82. 

BONA  FIDE  HOLDERS,  211-239. 

paper  must  be  complete  and  regular  on  face,  212. 

must  take  in  good  faith,  216. 

must  take  before  maturity,  214. 

must  take  for  value,  217-222. 

must  take  without  notice,  222. 

transferror's  title  defective,  223. 

notice  of  defect,  225. 

must  take  in  due  course  of  business,  227. 

purchasers  of  demand  paper,  215,  216. 

purchaser   of   paper   payable   to    order   must    obtain    indorsement   of 

payee,  213. 
of  instrument  signed  and  delivered  in  blank,  235. 
holder  deriving  title  through  holder  in  due  course.  241. 


428  INDEX. 

References  are  to  Pages. 

BONA  FIDE  HOLDERS  (continued)— 

payee  repurchasing  instrument  is  not,  241. 
presumption  and  burden  of  proof,  228-231. 

as  to  date  of  instrument,  21. 

as  to  delivery,  238. 
of  parts  of  bill  in  a  set,  liability  of  acceptor  of  more  than  one  part, 

147. 
rights  under  altered  instruments,  310-314. 
may  recover  against  accommodation  party,  220. 
may  recover  full  amount  of  instruments,  238. 
notice  from  irregularities  on  face  of  paper,  212. 

recital  "second  of  exchange,  first  unpaid,"  14. 
defenses  available   against,  232. 
incomplete  instruments,  26,  27. 
unindorsed  payments  no  defense  against,  233. 
fraud  and  duress  no  defense  against,  233. 
failure  of  consideration  no  defense  against,  234. 
omission  to  give  notice  of  dishonor  no  defense,  306. 
renunciation  no  defense,  337. 
no  recovery  on  forged  instrument,  307-310. 

BONDS,  seal  does  not  destroy  negotiability,  42. 

indemnity  against  presentation  of  lost  paper,  276. 

BROKER,  liability  on  negotiation  without  indorsement,  209. 

BURDEN  OF  PROOF.     See  Evidence. 

BUSINESS   HOURS,  presentment  for  acceptance  must  be  made  at  a 
reasonable  time,  122. 
time  of  presentment  for  payment,  249. 
of  instrument  payable  at  bank,  250. 

c. 

CANCELLATION,  discharge  by,  323. 

of  persons  secondarily  liable,  333. 

CAPACITY,  of  drawer,  admitted  by  acceptance,  193. 
of  payee  to  indorse,  admitted  by  acceptance,  193. 

admitted  by  certificate,  194,  195. 

admitted  by  maker  or  drawer,  189,  190. 
incapacity  of  drawee,  instrument  may  be  treated  as  bill  or  note,  110. 

presentment  for  acceptance  excused,  119. 

notice  of  dishonor  excused,  282,  283. 
incapacity  of  prior  parties,  rights  of  bona  fide  holders,  233. 


INDEX.  429 

References  are  to  Pages. 

CAPACITY  (continued)— 

warranty  of,  under  general  indorsement,  203. 

under  transfer  by  delivery  or  qualified  indorsement,  205. 

CASH,  instruments  payable  to,  are  payable  to  bearer,  80. 

CASH  NOTES,  instrument  payable  in,  is  payable  in  money,  63. 

CASHIER,  indorsement  by  or  to,  181. 
may  give  notice  of  dishonor,  286. 

CERTAINTY,  drawee  must  be  named  or  indicated  with,  83. 

payee  must  be  named  or  indicated  with,  81-83. 

in  sum  payable,  54-62. 

instruments  payable  with  exchange  are  sufficiently  certain,  58. 

instruments  payable  with  interest,  55. 

instruments  payable  in  instalments,  56. 

default  provisions,  57. 

instruments  providing  for  payment  of  attorneys'  fees  and  costs  are 
sufficiently  certain,  59. 

instruments  providing  for  payment  of  taxes  and  charges  are  not  cer- 
tain, 62. 

destroyed  by  alternative  contract  for  sale  of  collaterals,  87. 

as  to  place  of  payment,  84-86. 

as  to  time  of  payment,  64-67. 

instruments  payable  "on  or  before"  are  certain  as  to  time,  69. 

instruments  payable  on  contingency  not  negotiable,  70. 

as  to  time  from  which  interest  runs,  108,  109. 

CERTIFICATE,  of  protest,  conclusiveness,  272. 
receivers'  certificates  not  negotiable,  47. 
of  deposit,  47. 

CERTIFICATION,  of  checks,  148-150. 
presentment  of  check   for,  118. 

CHANGES  IN  THE  LAW,  seal  does  not  destroy  negotiability,  42,  43. 
provision  for  exchange  does  not  destroy  negotiability,  58. 
provision  for  payment  of  costs  of  collection  or  attorneys'  fees  does 

not  destroy  negotiability,  59-61. 
instruments  payable  to  order  of  holder  of  an  office  are  negotiable, 

75,  76. 
conditional  sale  note  not  negotiable,  88. 

instrument  payable  to  order  of  maker  must  be  indorsed  by  him,  73. 
consideration  for  non-negotiable  instrument  must  be  proved,  93. 
antecedent  or  pre-existing  debt  sufficient  consideration,  96. 
partial  want  or  failure  of  consideration  is  good  defense,  though  an 

unliquidated  amount  of  whole  consideration,  99. 


430  INDEX. 

References  are  to  Pages. 

CHANGES  IN  THE  LAW  (continued)  — 

one  signing  as  agent  without  authority  or  without  disclosing  principal 

is  liable  on  the  instrument,  31,  32. 
negotiable  bill   or  check  does  not  operate  as  assignment  of  funds, 

113. 
check  not  an  assignment  and  bank  not  liable  until  certification,  115. 
acceptance  must  be  in  writing,  132. 
promise  to  accept  must  be  in  writing,  ISO. 

drawee  must  accept  within  24  hours  after  presentment,  140,  141. 
acceptance  to  pay  at  particular  place  is  general,  145. 
person,  not  otherwise  a  party,  signing  in  blank  before  delivery  is  an 

indorser  and  liable  to  payee,  197. 
indorsement   of   cashier  or   "other  fiscal   officer"   is   indorsement   of 

bank  or  corporation,  181. 
indorser   without    qualification    of   instrument   indorsed    to    him    res- 

trictively  for  collection  or  deposit  is  liable  as  general  indorser,  204. 
joint  payees  or  indorsees  who  indorse,  deemed  to  indorse  jointly  and 

severally,  209. 
blank  indorsement  may  be  made  special,  170. 

person  required  to  pay  may  disregard  condition  in  indorsement,  177. 
transfer  of  sum  payable  to  two  or  more  indorsees  severally  is  not  a 

negotiation,   167. 
time    of   presentment   for   payment,    of  instruments    payable   on   de- 
mand, 255. 
instruments  payable  at  sight  are  payable  on  demand,  65,  66. 
days  of  grace  abolished,  253. 

notice  of  dishonor  may  be  sent  by  mail  in  all  cases,  294. 
notice  of  dishonor  need  not  be  signed,  292. 
holder  in  due  course  may  recover  full  amount,  238. 
holder  in  due  course  may  enforce  altered   instrument  according  to 

its  original  tenor,  312-314. 

CHARGES,  provision  for  payment  of  taxes  and  charges  renders  amount 
uncertain,  62. 

CHECKS,  definition,  14. 

instrument  not  naming  a  payee  is  not  a  check,  81. 

bank  cannot  presume  that  check  was  issued  for  value,  93. 

as  consideration  for  bill,  96. 

not  an  assignment  of  funds,  115. 

presentment  for  acceptance  or  certification,  117-129. 

certification,  148-150. 

payable   to   order,   transferee   without  indorsement  of  payee   not  a 

holder  in  due  course,  213. 
need  not  be  protested,  269. 


INDEX.  431 

References  are  to  Pages. 

CHECKS  (continued)— 

presentment  for  payment  necessary  to  charge  drawer,  243. 
time  of  presentment  for  paj^ment,  249. 
as  payment,  326-328. 

CHOSE  IN  ACTION,  non-negotiable,  distinguished  from  negotiable 
instrument,  158-161. 

CITIES,  municipal  warrants  and  orders,  not  negotiable,  53. 

CLERK,  of  drawee,  presentment  for  acceptance  may  be  made  to,  124. 
of  notary,  protest  by,  272,  273. 

CODIFICATION,  of  laws  relating  to  negotiable  instruments,  1. 
as  repeal  of  prior  statutes  on  same  subject,  8. 

COLLATERAL  AGREEMENTS,  memoranda  made  before  delivery  are 
part  of  contract,  112. 
affecting  liability  of  maker  or  drawer,  189. 
fixing  time  of  payment,  parol  evidence,  66. 
not  a  defense  against  bona  fide  holder,  234. 

COLLATERAL  SECURITIES,  provision  for  sale  of,  does  not  destroy 
negotiability,  86-88. 
alternative  contract  for  sale  of,  destroys  negotiability,  87. 
acceptance  of,  not  a  payment,  327. 

misapplied,  persons  secondarily  liable  are  discharged,  335. 
indorsement  as  collateral,  holding  for  value,  219,  220. 

COLLECTION,  provision  for  payment  of  costs  of,  does  not  destroy 
negotiability,  59-61. 

agency  for  authorizes  indorsement,  180. 

indorsements  for,  are  restrictive,  172,  173. 

indorsee  for,  may  receive  payment,  174. 

may  sue  in  his  own  name,  174,  175. 

indorsement  of  collecting  bank  does  not  imply  warranty  of  prior  in- 
dorsement, 204. 

indorsement  in  blank  after  indorsement  for  collection  is  general  in- 
dorsement, 204. 

agent  for  may  give  notice  of  dishonor,  286,  287. 

agency  for,  effect  on  time  required  for  notice  to  successive  obligors, 
299. 

holder  for,  may  present  for  payment,  247. 

agent  for,  is  entitled  to  receive  payment,  326. 

guaranty  of,  holder  must  first  exhaust  remedies  against  principal 
debtor,  267. 

bank  must  collect  draft  in  money,  327. 

COMMISSIONERS,  on  uniform  state  laws.  1. 


432  INDEX. 

References  are  to  Pages. 

COMMON  LAW,  governs  non-negotiable  instruments,  3,  4. 
act  a  codification  of,  1. 

rule  that  seal  destroys  negotiability  abolished  by  negotiable  instru- 
ments laws,  42,  43. 
statutes  and  decisions  affecting  law  merchant,  7,  8. 
oral  certification  of  check  good  at,  149. 

COMPETENCY,  indorsement  of  infant  or  corporation  passes  title,  178. 

COMPUTATION,  of  time  of  maturity,  254. 

CONDITIONAL,  agreements  for  attorneys'  fees,  effect  on  negotiability, 
59-6L 
sales,  notes  not  negotiable,  88.  « 

delivery,  36. 
acceptance,  143. 

cannot  be  shown  by  parol,  133,  134,  193. 
promise  to  accept,  150.  ' 

indorsement,  177. 

CONFESSION  OF  JUDGMENT,  provision  for,  does  not  destroy  ne- 
gotiability, 88. 

CONFLICT  OF  LAWS,  instrument  governed  by  law  in  force  at  time  of 
its  execution,  4. 
what  law  governs  instrument  executed  and  delivered  between  passage 

of  law  and  time  it  took  effect,  6. 
presumption  law  of  sister  state,  8. 

CONSENT,  freedom  of  necessary,  17. 

CONSECUTIVE  INDORSEES,  parol  evidence  to  show  to  which  "with- 
out recourse"  applies,  207. 

general  indorsement  warranting  capacity  of  prior  indorsers,  203. 

indorsement  of  collecting  bank  does  not  imply  warranty  of  prior 
indorsement,  204. 

notice  to  one  binds  him,  291. 

acceptance  for  honor  of  first  indorser,  155. 

CONSIDERATION,  statement  not  necessary  to  negotiability,  44. 
statement  in  instrument  does  not  destroy  negotiability,  44,  5L 
is  presumed,  92-94. 
presumption  of  sufficiency,  94. 
presumption  of  legality,  94. 
burden  of  proving  illegality,  94. 
illegality,  rights  of  bona  fide  holder,  233,  234. 
antecedent  or  pre-existing  debt  sufficient,  96. 
services,  95. 
waiver  of  legal  rights,  95. 


INDEX.  433 

References  are  to  Pages. 

CONSIDERATION   (continued)— 

one  negotiable  instrument  sufficient  consideration  for  another,  96. 
for  note  for  patent  right,  must  appear  in  note,  44. 
for  acceptance,  139. 

not  necessary  to  title  of  holder  taking  for  value  before  accept- 
ance, 218. 
for  promise  to  accept,  151. 
for  indorsement  or  transfer,  161,  166. 

holder  cannot  insert,  171. 

presumption,  161. 
purchase  for  value,  217-222. 

presumption  and  burden  of  proof,  228-231. 
for  agreement  to  extend  time,  334. 
for  waiver  of  protest,  276,  277. 
accommodation  paper,  101. 

corporations  cannot  become  accommodation  parties,  105. 
want  or  failure,  99. 

equitable  relief,  101. 

estoppel  to  set  up,  101. 
failure  of,  not  a  defense  against  bona  fide  holder,  232. 
inadequacy  no  defense,  101. 

CONSTITUTIONAL  LAW,  sufficiency  of  title,  3. 
application  of  laws,  5. 

constitutionality  of  statute  requiring  note  for  patent  right  to  so  state, 
45. 

CONSTRUCTION,  of  negotiable  instruments,  in  general,  2,  3. 
resort  to  previous  rules,  2. 

of  negotiable  instrument  laws,  substantial   compliance  sufficient,  41 
what  instruments  paj'able  to  order,  72-76. 
what  instruments  payable  to  bearer,  76-81. 
instrument   with    blank    space    for   name    of   payee    construed    to    be 

payable  to  order  of  maker,  82. 
what  instruments  payable  on  demand,  65-67. 
of  instruments  payable  at  fixed  period  after  date  or  sight,  70. 
paper  payable  "on  or  before"  specified  date  is  payable  on  that  date, 

69. 

"ninety  after  date"  means  90  days  after  date,  68. 

of  bill  drawn  in  a  set,  14. 

several  signers  under  "I   promise  to  pay"  are  jointly  and  severally 

liable.  111. 
"I  or  we  promise  to  pay"  creates  joint  and  several  liability.  111. 
"We  or  either  of  us  promise  to  pay"  creates  joint  and  several  liability, 

111. 

Opp. — Sel.— 28 


434  INDEX. 

References  are  to  Pages. 

CONSTRUCTION  (continued)— 

when  bill  may  be  treated  as  note,  110. 
of  provision  as  to  place  of  payment,  85. 

CONSTRUCTIVE  DELIVERY,  instrument  left  in  place  accessible  to 
payee,  36. 

CONTEMPORANEOUS   AGREEMENTS,   construed   as   part   of   con- 
tract, 112. 
fixing  time  of  payment,  66. 

CONTINGENCY,  instruments  payable  on,  not  negotiable,  70. 

CONTRACTS,  what  constitutes  promise  to  accept,  150. 

capacity  of  prior  parties  warranted  by  general  indorsement,  203. 
drawee  without  capacity,  notice  of  dishonor  excused,  283,  284. 
negotiability  of  order  charging  payment  to  amount  due  under  certain 

contract,  50,  51. 
alternative  contract  for  sale  of  collateral  destroys  negotiability,  86-88. 
acceptance  depending  on  completion  of,  is  qualified,  143,  144. 
rules  as  to  consideration  applied  to   negotiable  instruments,  94. 
rules  of  construction  applied  to  negotiable  instruments,  107. 
rules  governing  discharge  applied  to  negotiable  instruments,  324. 

CONTRIBUTION,  agreement  between   consecutive  indorsers,  207,  208. 
between  accommodation  indorsers  on  payment  by  one,  339. 

COPY,  of  lost  instrument,  protest  may  be  made  on,  275. 

CORPORATIONS,  corporate  paper  is  negotiable,  though  sealed,  43. 

bonds  are  negotiable,  42,  43. 

instrument  payable  to  trustees  of  corporation  "or  their  successors  in 
office,  or  order,"  is  negotiable,  75,  76. 

directors  personally  liable  on  acceptances  purporting  to  be  for  cor- 
poration not  authorized  to  accept,  194. 

indorsements  by  or  to  officers,  180,  181. 

transferee  of  note  without  indorsement  of  president,  not  a  holder  in 
due  course,  213. 

COSTS,  instruments  providing  for  payment  of,  negotiability,  59. 
erasure  of  agreement  to  pay  is  material  alteration,  316. 

COUNTERCLAIM,  holder  of  negotiable  instrument  may  interpose,  160. 

no  defense  against  bona  fide  holder,  232. 
COUNTY  ORDERS,  not  negotiable,  53. 

COUPONS,  detached  from  negotiable  bonds  are  negotiable,  42. 
COVENANT,  construction  of  instrument,  covenant  or  bill  of  exchange, 
45. 

CREDITS,  as  payment,  326. 


INDEX.  435 

References  are  to  Pa  pes. 

CURRENCY,  instrument  payable  in,  negotiability,  63. 

CURRENT  FUNDS,  instruments  payable  in,  not  negotiable,  63. 

CURRENT  MONEY,  instruments  may  be  payable  in  particular  kind  of 
money,  63. 

CUSTOM,  affecting  time  of  presentment  for  acceptance,  120-122. 
affecting  manner  of  sending  bill  for  acceptance,  121. 
evidence  of,  to  show  instrument  payable  in  current  funds  to  be  pay-^ 
able  in  money,  63. 

CUSTOM  OF  MERCHANTS.     See  Law  Merchant. 

D. 

DAMAGES,  for  breach  of  warranty  of  genuineness,  201. 
from  want  of  notice,  defense  by  guarantor,  282. 
on  protest  of  foreign  bill,  278,  279. 

DATE,  not  necessary  to  validity  or  negotiability,  19,  41. 
presumed  as  of  date  of  issue,  19. 
date  presumed  correct,  21. 

holders  in  due  course,  21. 
defective,  does  not  invalidate  order,  19. 
antedating,  23. 
postdating,  23. 

parol  evidence  where  date  is  ambiguous  or  illegible,  22. 
may  be  inserted  by  holder,  20. 
filling  blanks,  20. 
from  which  interest  runs,  108. 
of  acceptance,  141. 

takes  date  from  presentment,  141. 
recital  in  notice  of  dishonor,  293. 
change  of,  is  material  alteration,  21. 

instruments  payable  at  fixed  period  after  is  certain  as  to  time,  67. 
mistake  in,  burden  of  proof,  21. 

may  be  shown  by  parol,  22. 

cannot  be  shown  against  bona  fide  holder,  234. 
laws  take  effect,  5. 

DAYS  OF  GRACE,  time  of  maturity,  253. 

DEATH,  instrument  payable  at  death  is  negotiable,  70. 

of  drawee,   presentment   for  acceptance   may   be   made   to   personal 

representative,  126. 
of  drawee,  presentment  for  acceptance  excused,  119. 
of  holder,  excuse  for  delay  in  presentment  for  payment,  119. 


436  INDEX. 

References  are  to  Pages. 
DEATH   (continued)— 

of  member  of  firm  primarily  liable,  presentment  for  payment  to  sur- 
vivor, 247. 
of  person  primarily  liable,  presentment  for  payment  to  personal  rep- 
resentative, 247. 
of  principal,  revoking  agency  to  receive  notice  of  dishonor,  289. 
of  party  to  receive  notice,  service  on  personal  representative,  289. 

DECLARATION,  before  payment  for  honor,  320. 

DEFAULT,  provision  hastening  maturity  of  instrument  payable  in  in- 
stalments, does  not  destroy  negotiability,  57. 

DEFENSES,  want  or  failure  of  consideration,  99. 

want  of  consideration  no  defense  to  acceptor  against  payee,  140. 
by  guarantor,  want  of  notice  of  dishonor,  282. 
available  against  bona  fide  holder,  232. 

DEFINITIONS,  promissory  note,  10. 
acceptance,  16. 
action,  16. 
bank,  16. 
bearer,   16. 
bill,  16. 

bill  of  exchange,  11. 
check,  14. 
delivery,  16. 

inland  and  foreign  bills,  13. 
indorsement,  16. 
instrument,  16. 
issue,  16. 
holder,  16. 
person,  16. 

person  primarily  liable,  336. 
value,  16. 
written,  16. 

DELAY,  in  presentment  for  acceptance,  121. 

in  presentment  for  payment,  when  excusable,  259. 
protest,  277. 

in  enforcing  payment  does  not  discharge  persons  secondarily  liable, 
334. 

DELIVERY,  definition,  4,  16,  35. 

essential  to  completion  of  contract,  34,  35. 

of  instrument  before  passace  of  nr-r^tv-'Me  instrument  law,  4. 

possession  prima  facie  evidence  of,  37,  38. 

suf&ciency,  35,  36. 


INDEX.  437 

References  are  to  Pages. 
DELIVERY  (continued)— 
by  mail,  36. 
corulitional,  36,  37. 
of  acceptance,  132. 
negotiation  by,  163. 

implied  warranties,  201. 
essential  to  transfer  by  indorsement,  166. 
indorsement  of  paper  negotiable  by  delivery,  197. 
instruments  payable  to  bearer,  specially  indorsed,  pass  by  delivery, 

170. 
want  of,  as  defense  against  bona  fide  holder,  232-235. 
presumptions,  37,  38. 

presumed  in  favor  of  holder  in  due  course,  235. 
instrument   signed   and   delivered   in   blank  relates   back   to   time   of 

original  delivery,  36. 
title  by,  under  indorsement  in  blank,  171,  172. 
title  to  antedated  or  postdated  instrument  dates  from,  23. 
DEMAND,  instrument  must  be  payable  on,  or  at  fixed  or  determinable 

future  time,  64. 
on  instrument  executed  before  passage  of  law,  not  governed  thereby, 

4. 
what  instruments  payable  on,  65,  66. 

instrument  payable  at  maker's  convenience  is  payable  on,  65. 
instrumicnt  payable  "at  any  time  called  for"  is  payable  on,  65. 
instrument  payable  on  the  "first  day  of  March,"  no  year  expressel, 

is  payable  on,  65. 
instruments  not  stating  time  of  payment  are  payable  on,  66. 
instruments  issued,  accepted  or  indorsed  when  overdue  are  payable 

on,  66. 
check  always  payable  on,  15. 

note  payable  in  instalments  construed  to  be  payable  on,  56. 
inures  to  subsequent  holders  of  dishonored  paper,  67. 
note  payable  on,  draws  interest  from  date,  108. 
bills  payable  on,  need  not  be  presented  for  acceptance,  117,  118. 
paper   negotiated    unreasonable    time    after    issuance,    purchaser    not 

holder  in  due  course,  215. 
time  for  presentment  for  payment  of  instruments  payable  on,  254-259. 
DE  MINIMIS,  maxim  does  not  apply  to  alterations,  316,  317. 
DEPOSIT,  certificates  of  are  negotiable,  47. 
indorsement  for,  restrictive,  172. 

DEPOSIT  IN  COURT,  savings  bank  sued  on  draft  claimed  by  third  per- 
son cannot  deposit  fund  in  court  pending  suit,   115. 
DESCRIPTIO  PERSONALE,  words  denoting  agency,  32,  33. 
in  indorsement,  181. 


i38  INDEX. 

References  are  to  Pages. 

DESCRIPTION,  of  bill  in  promise  to  accept,  150. 

DESTRUCTION,  of  instrument  before  delivery,  35. 
of  bill  by  drawee,  implied  acceptance,  135. 
of  check,  excuse  for  presentment  for  payment,  276. 

DETENTION,  of  bill  by  drawee,  implied  acceptance,  135. 
protest  of  detained  bill,  275,  276. 

DETERMINABLE  FUTURE  TIME,  certainty  as  to  time  of  payment, 

a. 
DILIGENCE,  in  presenting  for  payment  at  place  designated,  262. 

as  an  excuse  for  failure  to  present  for  acceptance,  119. 

in  giving  notice  of  dishonor,  302. 

DIRECTORS,  personally  liable  on  acceptances  purporting  to  be  for  cor- 
poration   not   authorized    to   accept,    194. 

DIRECTORY,   sending  notice   to   directory   address   not   sufficient   dili- 
gence, 302. 
DISABILITY,  indorsement  by  infant  or  corporation  passes  title,  178. 

DISCHARGE,  of  drawer  by  negligence  of  payee,  191. 

of  drawer  or  indorser  by  want  of  notice  of  dishonor,  281. 

of  drawer  and  indorsers  by  failure  to  protest,  269. 

of  drawer  of  check  by  delay  in  presenting  for  payment,  243,  259. 

of  indorser  releases  subsequent  indorsers,  ZZZ. 

of  prior  party  discharges  person  secondarily  liable,  334. 

of  indorser  whose  name  is  struck  out  and  all  subsequent  indorsers, 
185. 

by  renunciation,  336. 

by  cancellation,  323,  333. 

by  payment,  320. 
DISCOUNT,    provision    for    discount   if   note    be    paid   before    maturity 
destroys  negotiability,  56. 

of  accommodation  paper,  104. 

procured  by  maker  is  notice  that  indorsement  was  for  accommoda- 
tion, 226. 

discounting  bank  as  purchaser  for  value,  221. 

DISHONOR,  by  nonacceptance,  127. 

bill  dishonored  if  drawee  refuses  to  put  acceptance  on  face  bill,  134. 

acceptance  of  dishonored  bill,  146. 

by  acceptor  for  honor,  bill  must  be  protested,  274. 

recital  in  notice  necessary,  292,  293. 

notice  of,  281-307. 

by  nonpayment,  266. 

provision  to  pay  made  after,  waiver  of  notice  of  dishonor,  304. 


INDEX.  439 

References  are  to  Pages. 
DISSOLUTION,  of  firm  primarily  liable,  presentmenf  for  payment,  248. 

DRAFT.     Same  as  Bill  of  Exchange,  12. 

DRAWEE,  must  be  named  or  indicated  with  certainty,  83. 
bill  may  be  addressed  to  several  jointly,  12. 
bill  cannot  be  addressed  to  two  or  more  drawees  in  alternative  or  in 

succession,  12. 
in  case  of  need,  insertion  of  name  in  bill,  128. 
instruments  payable  to  order  of  are  payable  to  order,  74. 
presentment  for  acceptance  must  be  made  to,  125. 
discharge  by  failure  to  present  for  acceptance  in  time,  121. 
not  liable  until  acceptance,  130. 

must  accept  within  24  hours  after  presentment,  140. 
absence  not  a  refusal  to  accept,  125. 
implied  acceptance  by  retaining  or  destroying  bill,  135. 
by  accepting  admits  that  he  is  in  funds,  191. 
by  accepting  undertakes  to  pay  at  maturity,  191. 
must  sign  acceptance,  132. 

name  written  on  bill  is  sufficient  acceptance,  132. 
revocation  of  acceptance,  131. 
bill  does  not  operate  as  assignment  of  funds,  113. 
bankruptcy,  presentment  for  acceptance  may  be  made  to  bankrupt  or 

to  trustee,  126. 
acceptance  by  one  of  several  is  qualified,  143. 
acceptance  of  more  than  one  part  of  bill  in  a  set,  147. 
acceptance  for  honor  at  instance  of,  154. 
same  person  as  drawer,  holder  may  treat  bill  as  note,  110. 
without  capacity  to  contract,  instrument  may  be  treated  as  bill  or 
note,  110. 

presentment  for  acceptance  excused,  119. 
fictitious,  instrument  may  be  treated  as  note  or  bill,  110. 

presentment  for  acceptance  excused,  119. 

presentment  for  payment  excused,  265. 
dead,  personal   representative   may   receive  presentment   for  accept- 
ance, 126. 
death,  excuses  presentment  for  acceptance,  119. 

DRAWER,  signature  of,  28. 

right  to  insert  name  of  referee  in  case  of  need,  128. 
instruments  payable  to  order  of,  are  payable  to  order,  73. 
instrument    with    blank    space    for   name   of   payee    construed    to    be 

payable  to  order  of  maker,  82. 
existence  admitted  by  acceptance,  191. 
waiver  of  presentment  for  acceptance,  122. 


440  INDEX. 

References  are  to  Pages. 

DRAWER  (continued)— 

entitled  to  notice  of  dishonor,  281. 

when  notice  need  not  be  given  to,  282,  283. 

same  person  as  drawee,  holder  may  treat  bill  as  note,  110. 

notice  of  dishonor  not  necessary,  282,  283. 
acceptance  for  honor  of,  153. 

presentment  for  payment  is  necessary  to  charge,  243. 
liability  of,  in  general,  190. 

join  and  several  liability  of  several  drawers,  111. 
liability  to  referee  in  case  of  need,  128. 
discharged  when  payee  sends  draft  by  mail,  and  fails  to  discover  loss 

for  six  months,  191. 
recourse  by  holder  against,  in  case  of  nonacceptance,  127,  128. 
of  check  discharged  by  delay  in  presentment,  256-259. 
discharged  by  certification  procured  by  holder,  150. 
liability  on  separate  parts  of  bill  in  a  set,  147. 
discharged  by  qualified  acceptance,  146. 
discharged  by  failure  to  protest,  268,  269. 

DUEBILL,  not  negotiable,  45. 

DUE  COURSE,  what  constitutes,  211. 
holders  in,  211-240. 

DUPLICATE,  check  made  in,  not  a  bill,  16. 

DURESS,  right  of  bona  fide  holder,  233. 
in  procuring  execution,  18. 

E. 

ELECTION,  of  holder  to  require  something  in  lieu  of  money,  90. 
of  holder  to  treat  bill  as  note,  110. 

EPIDEMIC,  provision  in  charter  of  Greater  New  York  for  presentment 

and  protest  in  case  of  epidemic  in  city,  123,  124. 

EQUITABLE  ASSIGNMENT,  bill  or  check  does  not  operate  as,  113- 
116. 
effect  of  order,  113-115. 

EQUITIES,    available    against    assignee    of    non-negotiable    instrument, 
159. 
what  are,  rights  of  bona  fide  holders,  211-240. 

EQUITY,  relief  on  ground  of  want  of  consideration,  99,  100. 

relief  denied  to  indorser  not  diligent  in  protecting  himself  against 
loss  of  security  by  prior  parties,  335. 

ESSENTIALS  OF  NEGOTIABILITY.    See  Negotiability. 


INDEX,  441 

References  are  to  Pages. 

ESTATE,  instrument  payable  to,  does  not  sufficiently  designate  payee, 
82. 

is  payable  to  bearer,  80. 
notice  sent  to  "estate  of"  a  certain  person  not  sufficient,  289. 

ESTOPPEL,  to  set  up  want  or  failure  of  consideration,  99. 

to  question  instrument  signed  and  delivered  in  blank,  235-237. 
to  deny  forged  or  unauthorized  signature,  309. 

EVIDENCE,  of  authority  of  agent  to  sign,  31. 

of  delivery  before  passage  of  negotiable  instrument  law,  5. 
of  custom,  to  show  instrument  payable  in  current  funds  to  be  pay- 
able in  money,  63. 
of  consideration,  92-94. 

of  gross  negligence  of  holder  is  evidence  of  bad  faith,  217. 
certificate  of  protest,  conclusive  evidence  of  facts  recited,  272. 
judicial  notice,  purpose  of  act,  2. 
presumption  that  law  merchant  is  in  force,  7. 
presumption  as  to  legislative  intent  in  postponing  time  for  statute 

to  go  into  effect,  4. 
presumption  as  to  date,  19. 

date  of  acceptance  prima  facie  true  date,  142. 
presumption  of  delivery,  37,  38. 

before  passage  of  law,  5. 

in  favor  of  bona  fide  holder,  228. 
presumption  of  consideration,  92-94. 

for  acceptance,  139. 

for  indorsement  of  transfer,  161,  166. 

in  favor  of  holder,  218. 

rebuttal,  92-94. 
presumption  that  signature  was  not  for  accommodation,  103. 
presumption  as  to  time  and  place  of  indorsement,  183. 
presumption  that  holder  took  in  due  course,  228. 
no  presumption  that  drawee  will  accept  more  than  one  part  of  bill 

m  set,  126. 
presumption  of  payment  rather  than  purchase,  323. 
presumption  and  burden  of  proof  as  to  alterations,  317,  318. 
presumption   held   conclusive  that   certain   presentment   was   for  ac- 
ceptance not  payment,  122. 
burden  of  proof,  as  to  mistake  in  date,  19. 

consideration,  92. 

cancellation,  324. 

holding  in  due  course,  228. 


442  INDEX. 

References  are  to  Pages. 

EVIDENCE  (continued)— 

parol,  as  to  memoranda  made  before  delivery,  112. 
to  show  accommodation  character,  102. 
as  to  mistake  in  name  of  payee,  83. 
to  explain  ambiguous  or  illegible  date,  22. 
to  show  mistake  in  date,  21,  22. 
to  negative  liability  of  indorser  in  blank,  170. 
to  show  that  intent  was  to  pay  in  money,  62. 
to  fix  time  of  payment  where  none  is  stated,  66. 
showing   application   of   words    "without   recourse"   to,   some   of 

several  successive  indorsers,  177. 
showing  order  of  liability  of  consecutive  indorsers,  207. 

EXCHANGE,  provision  for,  does  not  destroy  negotiability,  58. 

promise  to  accept  bill  not  an  acceptance  of  bill  "with  exchange,"  150. 

EXCHANGE,  BILL  OF.     See  Bill  of  Exchange. 

EXCHANGE  OF  PAPER,  consideration,  96. 
not  accommodation  paper,  103. 

EXECUTION,  of  negotiable  instruments,  17-34. 

matters  necessary  to  valid  execution  also  necessary  to  negotiability, 

40. 
seal  as  part  of  proper  execution  of  corporate  paper,  42,  43. 
defective,  as  defense  against  bona  fide  holder,  232-235. 
place  of,  as  proper  place  for  presentment  for  payment,  263. 
waiver  of  exemption  or  stay  laws  does  not  destroy  negotiability,  89. 

EXECUTORS,  personal  liability  on  notes,  31. 

"executor"  added  to  signature  does  not  relieve  signer  from  personal 

liability,  32,  33. 
may  receive  notice  of  dishonor,  289. 

EXEMPTION    LAWS,    negotiability    not    destroyed    by    provision    for 
waiver  of  benefits,  89. 

EXHIBITION,  of  instrument  on  presentment  for  payment,  263,  264. 

EXPENSES,  instruments  payable  to,  are  payable  to  bearer,  80. 

EXTENSION,  discharges  persons  secondarily  liable,  334. 

FAILURE  OF  CONSIDERATION,  99-101. 

FALSE  REPRESENTATIONS,  not  a  defense  against  bona  fide  holder, 
232-235. 

FARM  PRODUCTS,  note  for  speculation  in,  must  so  state,  44,  45. 


INDEX.  443 

References  are  to  Pagres. 

FEES,  of  attorneys,  provision   for  payment  of  does  not   destroy  nego- 
tiability, 59-61. 

FICTITIOUS  PERSON,  drawee,  instrument  may  be  treated  as  bill  or 
note,  110. 
presentment  for  acceptance  excused,  119. 
notice  of  dishonor  excused,  283,  284. 
instruments  payable  to  order  of  fictitious  payee  are  payable  to  bearer, 
77-80. 

FIGURES,  on  margin,  control  amount  to  be  inserted  in  blank,  27, 
controlled  by  words  in  body  of  instrument,  107. 
used  as  signature,  29. 

FILLING  BLANKS,  prima  facie  authority  of  holder,  23-27. 
for  name  of  payee,  25. 
time  and  place  of  payment,  25. 
amount  payable,  25. 
paper  signed  in  blank,  25. 
rights  of  holders  in  due  course,  27. 

FIRST  OF  EXCHANGE,  bill  drawn  in  a  set,  14. 

FISCAL  OFFICERS,  of  corporations  may  indorse  for  it,  181,  182. 

FORBEARANCE,  as  consideration  for  negotiable  instrument,  94,  95. 
for  acceptance,  139. 

FOREIGN  BILLS,  definition,  13. 

check  drawn  by  bank  in  one  state  on  bank  in  another,  not  a  foreign 

bill,  13. 
designation  as  drafts,  12. 
m.ust  be  protested,  268,  269. 
damages  on  protest,  278,  279. 

FOREIGN  MONEY,  instruments  payable  in,  negotiability,  63. 

FORGERY,  2. 

acceptor  cannot  set  up,  307-310. 

last  of  several  sureties  cannot  set  up  forgery  of  names  of  prior  sure- 
ties, 307-310. 

of  name  of  maker,  liability  of  general  indorser,  under  warranty  of 
genuineness,  205. 

FORM,  of  signature  of  maker  or  drawer,  29. 
of  negotiable  instrument,  40-90. 
of  acceptance,  131. 

conformity  of  bill  with  promise  to  accept,  150. 
of  indorsement,  168. 
completeness  and  regularity  essential  to  holding  in  due  course,  212. 


444  INDEX. 

References  are  to  Pages. 

FORM  (continued)— 

of  notice  of  dishonor,  291,  292. 

of  protest,  270-272. 
FRAUD,  in  obtaining  delivery  avoids  instrument,  36. 

defect  in  title  of  person  negotiating,  223-225. 

in  procuring  execution,  18. 
FRAUDS,  STATUTE  OF,  oral  acceptances,  132. 

oral  promise  to  pay  check,  149. 
FUND,  instruments  payable  out  of  particular  fund,  not  negotiable,  52. 

drawee  v/ithout  funds,  notice  to  drawer  excused,  283. 

G. 

GAMING,  rule  that  bona  fide  holder  may  recover  full  amount  does  not 

cure  gaming  transactions,  238. 
GARNISHMENT,  of  maker  before  maturity,  189,  190. 
GENERAL  INDORSER,  liability  of,  203. 

GENUINENESS,  warranty  under  transfer  by   delivery  or  qualified  in- 
dorsement, 202. 
GOLD,  instruments  payable  in  are  negotiable,  63. 
GOOD  FAITH,  essential  to  holding  in  due  course,  216. 

as  affecting  notice,  225. 

inadequacy  of  consideration  does  not  show  mala  fides,  238. 

burden  of  proof,  228. 

GRACE,  days  of,  253. 

purchase  on  last  day  of,  is  purchase  before  maturity,  215. 

GUARANTY,  signers  held  to  be  guarantors,  not  indorsers,  195-198. 
by  drawee,  of  acceptance  for  honor,  154. 
for    collection,    holder    must    exhaust     remedies    against    principal 

debtor,  267. 
holder  cannot  add  contract  of,  170. 

with  indorsement  of  paper  negotiable  by  delivery,  liability  as  gen- 
eral  indorser,   197. 
notice  of  dishonor  to  guarantor,  282. 

H. 

HEIRS,  instrument  payable  to  "the  heirs"  of  certain  person  to  sufficiently 

certain  as  to  payees,  82. 
HOLDER,   definition,    16. 

prima  facie  authority  to  fill  blanks,  24-27. 


INDEX.  i45 

References  are  to  Pages. 

HOLDER  (continued)— 
may  insert  date,  20. 

of  acceptance,  141. 
instrument  payable  to  certain  person  "or  holder"  is  payable  to  bearer, 

77. 
judgment  note  should  authorize  confession  of  judgment  in  favor  of 

"holder,"  88. 
option  to  treat  bill  as  note,  110. 

to  require  something  in  lieu  of  money,  does  not  destroy  negotia- 
bility, 90. 

to  resort  to  referee  in  case  of  need,  128. 
entitled  to  acceptance  on  face  of- bill,  133. 
entitled  to  unqualified  acceptance,   145. 
proper  person  to  present  for  acceptance,  125. 

must  present  for  acceptance  or  negotiate  within  reasonable  time,  120 
rights  and  duties  on  dishonor  for  nonacceptance,  127,  128. 
may  convert  blank  indorsement  mto  special  indorsement,  170. 
may  strike  out  unnecessary  indorsements,  185. 
cannot  insert  anything  changing  nature  of  indorsement,   170. 
in  due  course,  210-239. 

presumption,  228. 

presumption  as  to  date  of  instrument  in  hands  of,  22. 

of   bill    drawn    in    set,    liability    of   acceptor    on    more    than    one 
part,  147. 
with  lien  is  holder  for  value,  219. 

deriving  title  from  holder  in  due  course,  is  holder  in  due  course,  241. 
certification  of  check  procured  by,  discharges  drawer  and  prior  ir^- 

dorsers,  149. 
must  present  for  payment,  246. 
must  give  notice  of  dishonor,  285-288. 
recourse  against  persons  secondarily  liable,  267. 
payment  to,  320. 
refusal  to  receive  payment  for  honor,  332. 

HOLDER  IN  DUE  COURSE.     See  Bona  Fide  Plolders. 

HOLIDAY,  day  of  maturity,  presentment  on  next  business  day,  252. 

HOMESTEAD  LAWS,  negotiability  not  destroyed  by  provision  waiv- 
ing benefits,  89. 

HONOR,  acceptance  for,  153-156. 
payment  for,  329-332. 

I. 

IDENTIFICATION,  of  bill  in  promise  to  accept,  150. 
of  instrument  in  notice  of  dishonor,  292,  293. 


446  INDEX. 

References  are  to  Pages. 

ILLEGAL  PROVISIONS,  do  not  destroy  negotiability,  90. 

IMPLIED  PROMISE,  sustaining  negotiability  of  acknowledgments,  45. 

IMPLIED   REPEAL,  of  statutes  by  negotiable  instruments  laws,  8,  9. 

IMPLIED  WAIVER,  of  presentment  for  payment,  264,  265. 
of  notice  of  dishonor,  303. 

IMPLIED  WARRANTIES,  of  nonpayment  on  sale  of  instrument,  163. 
on  negotiation  by  delivery  or  qualified  indorsement,  201. 
liability  of  indorser  without  recourse,  176. 

INCAPACITY,  to  execute,  18. 

INCOMPLETE   INSTRUMENTS,  23-27. 

INDEMNITY,  against  presentation  of  lost  paper  by  bona  fide  holder, 
276. 

against  effect  of  forgery,  ratification,  307-310. 

to  person  secondarily  liable  defeats  discharge  by  extension  to  princi- 
pal debtor,  335. 

INDORSEMENT,  158-186. 
definition,  16. 
negotiation  by,  165. 

signature  of  indorser  sufficient  indorsement,  168. 
status  of  person  signing  in  doubtful  capacity,  195-198. 
may  be  in  pencil,  18. 
must  be  of  entire  instrument,  167. 
delivery  essential,  166. 

capacity  of  payee  to  indorse,   admitted  by   acceptance,    191-195. 
maker  or  drawer  admits  capacity  of  payee  to  indorse,  189,  190. 
by  corporation  or  infant  passes  title,  178. 
not  necessary  to  transfer  of  warehouse  receipts,  46. 
negotiable  words  may  be  supplied  by,  72. 

of  statement  of  property  owned  by  maker  does  not  destroy  nego- 
tiability, 51. 
maker  must  indorse  instrument  payable  to  his  order,  73. 
after  maturity  as  creating  new  instrument,  66,  67. 
for  accommodation,  101. 
of  certified  check,  195. 

joint  payees  or  indorsees  must  all  indorse,  179. 
by  agent  or  in  representative  capacity,  180,  181. 
by  or  to  cashier  or  other  fiscal  officer,  181. 
ratification,  180,  181. 
time  and  place,  183,  184. 

transfer  without,  of  instrument  payable  to  order,  162. 
omitted  by  mistake,  when  made  relates  back  to  time  of  transfer,  162. 


INDEX.  447 

References  are  to  Pagea. 

INDORSEMENT  (continued)— 

unnecessary,   of  paper  negotiable  by  delivery,   163. 

notice  to  purchasers  of  infirmities  and  defects,  222. 

right  of  indorser  to  insert  name  of  referee  in  case  of  need,  128. 

of  note  paj'able  to  order  of  maker,  7Z. 

striking  out  and  reissuing  instrument,  185,  186. 

general,  warrants  title  in  indorser,  203. 

in  blank,  171. 

instrument  is  payable  to  bearer,  76-81. 

striking  out,  185. 

made  special,  170. 
special,  of  instrument  payable  to  bearer,  170. 

indorsee  must  indorse,   169,  170. 
restrictive,  172-174. 
qualified,  175. 

implied  warranties,  201. 
without  recourse,  175. 

parol  evidence  applying  term  to  some  of  several  endorsers,  177. 
conditional,  177. 

irregular,  liability  of  indorser,  198. 
consecutive  indorsers,  207. 
acceptance  for  honor  of  first  indorser,  153. 

instruments  indorsed  when  overdue  are  payable  on  demand,  65,  67. 
holder  cannot  change,  170. 
liability  of  indorsers,  195-209. 

presentment  for  payment  necessary  to  change  indorsers,  243. 
indorser  entitled  to  notice  of  dishonor,  281,  282. 
when  notice  need  not  be  given  to  indorser,  284,  285. 
when  indorser  bound  by  written  waiver  of  notice  of  dishonor,  304. 
joint  indorsees  deemed  to  indorse  jointly  and  severally,  207. 
warranties  under  general  indorsement,  203-207. 
warranty  of  capacity  of  prior  indorsers,  203-207. 
liability  of  indorsers  on  separate  parts  of  bills  in  a  set,  201. 
holder  has  right  of  recourse  against  indorsers  on  dishonor  for  non- 
acceptance,  127. 
discharge  of  indorsers  by  certification  procured  by  subsequent  holder, 

150. 
discharge  of  indorser  by  qualified  acceptance,   146. 
discharge  of  indorser  by  want  of  timely  presentment  for  acceptance, 

120,  121. 
indorser  held  not  discharged  by  delay  in  presenting  for  acceptance, 

120-122. 
indorsers  discharged  by  failure  to  protest,  268,  269. 


448  INDEX. 

References  are  to  Pageg. 

INDORSEMENT  (continued)— 

discharge  of  indorser  releases  subsequent  indorsers,  333. 

discharge  of  indorser  whose  name  is  struck  out,  185. 

after  maturity  of  paper  transferred  before  maturity,  holding  in  due 

course,  214-216. 
forged,  no  recovery  by  bona  fide  holder,  307-310. 
to  acceptor  or  maker  discharges  instrument,  324. 
of  note  payable  to  order  of  maker,  provision  does  not  apply  to  note 

negotiated  before  passage  of  law,  5. 
made  after  passage  of  act,  application  to,  4. 

INFANTS,  indorsement  by,  passes  title,  178. 

INITIALS,  signature  by  is  sufficient,  29. 

INLAND  BILLS,  definition,  13. 
designation  as  drafts,  12. 
need  not  be  protested,  268,  269. 

INSOLVENCY,  of  drawee,  presentment  for  acceptance  may  be  made  to 
insolvent  or  to  his  trustee  or  assignee,  126. 
protest  before  maturity  where  acceptor  is  insolvent,  274. 
of  person  primarily  liable  does  not  excuse  presentment,  265. 
of  party  to  receive  notice,  service  on  assignee  or  trustee,  291. 

INSTALMENTS,  instruments  payable  in  are  negotiable,  56. 

INSIRUAIENT,  means  negotiable  instrument,  16. 

INSURANCE,  notes  for  fire  insurance  must  state  consideration  in  Wis- 
consin, 44. 

premium  notes  negotiable,  52. 

premium  note  for  payment  of'  "such  additional  premium  as  may 
arise"  on  certain  policy,  not  negotiable,  55. 

INTEREST,  filling  blanks  for,  25. 

provision  for  does  not  destroy  negotiability,  55,  56. 

provision  that  default  shall  mature  principal  debt  does  not  destroy 

negotiability,  57. 
coupons  detached  from  negotiable  bonds  are  negotiable,  42. 
construction  of  interest  clause,  108. 

overdue,  does  not  destroy  bona  fide  character  of  purchase,  214. 
as  damages  on  protest  of  foreign  bill,  278,  279. 
alteration  of,  is  material,  314-316. 

INTERLINEATIONS,  not  presumed  to  be  alterations,  317,  318. 

'T.  O.  U.,"  not  negotiable,  45. 

IRREGULAR  INDORSER,  who  is,  178.  179. 


INDEX.  449 

Sefcrencee  pre  to  Pages. 

ISSUE.     See,  also,  Delivery, 
definition,  16. 
instruments  issued  when  overdue  are  payable  on  demand,  65-67. 

J. 

JOINT  PARTIES,  111,  112. 

bill  may  be  addressed  to  joint  drawees,  12. 

instruments  payable  to  two  or  more  payees  jointly  are  payable   to 

order,  74. 
consideration  passing  to  one  or  several  joint  makers  is  sufficient,  96. 
"We  promise  to  pay"  creates  joint  liability,  111,  112. 
presentment    for    acceptance    of    bill    addressed    to    two    or    more 

drawees,  125. 
joint  payees  or  indorsees  must  all  indorse,  179. 
agreement  of  consecutive  indorsers  for  joint  liability,  207. 
must  each  be  notified  of  dishonor  unless  partners,  290. 
payment  by  one  joint  maker  discharges  debt,  321. 
joint  and  several  liability.  111,  112. 

JUDGMENT  NOTES,  negotiable,  88. 

JUDICIAL  NOTICE,  purpose  of  act,  2. 

JUDICIAL  SALE,  notes  for  purchase  money,  negotiability,  75,  70. 

K. 

KNOWLEDGE,  of  dishonor,  is  not  notice,  292. 
of  president  of  bank,  when  notice  to  bank,  227. 

L. 

LARCENY,  bona  fide  purchasers  of  stolen  paper,  222. 

LAW  MERCHANT,  presumed  to  be  in  force,  8. 
as  part  of  common  law,  8. 
bills  of  exchange  were  always  within,  7. 

governs  in  cases  not  covered  by  negotiable  instruments  laws,  7. 
act  a  codification  of,  1. 
what  is,  7. 

LEGISLATURE,  postponing  time  for  statute  to  take  effect,  presump- 
tions, 5-7. 

LETTER,  containing  promise  to  accept  is  an  acceptance,  151. 
Opp.— Sel.— 29 


450  INDEX. 

References  are  to  Pages. 
LETTER  BOX,  deposit  of  notice  of  dishonor  in,  295. 
LIEN,  on  instrument,  lienholder  as  holder  for  value,  219. 
LOST  INSTRUMENT,  protest  on  copy,  275. 

M. 

MAIL,  posting  is  a  delivery,  36. 

delay  in  mails  excusing  failure  to  make  timely  presentment  for  ac- 
ceptance, 12L 

service  of  notice  of  protest  in  case  of  epidemic  in  New  York  City, 
123,  124. 

notice  of  dishonor  by,  294,  295. 

miscarriage  of  notice  of  dishonor,  sender  not  chargeable,  295. 

MAKER,  status  of  person,  not  otherwise  a  party,  placing  signature  on 
paper  before  delivery,  198-201. 
signature  of,  28. 

position  as  indicating  character,  28. 
ambiguous  location  of  name,  29. 
representative  or  individual  capacity,  29. 
must  indorse  instrument  drawn  payable  to  his  order,  73. 
instruments  payable  to  order  of,  are  payable  to  order,  72. 
consideration  passing  to  one  of  several  joint  makers  is  sufficient,  96. 
genuineness  of  signature  warranted  by  general  indorsement,  203-207. 
capacity  warranted  by  general  indorsement,  203-207. 
presumed  to  reside  in  state  where  note  was  executed,  263. 
liability  of,  189. 

joint  and  several  liability  of  several  makers.  111. 
for  accommodation  not  liable  to  original  payee,  103,  104. 

MARGINAL  FIGURES,  control  amount  to  be  inserted  in  blank,  27. 
MARGINAL    STIPULATIONS,   for   discounts    if   note   be   paid    before 
maturity,  destroys  negotiability,  56. 

MARK,  as  signature,  29. 

MARRIED  WOMEN,  acceptor  of  bill  drawn  by,  estopped  to  deny  com- 
petency, 193. 

MATURITY,  time  of,  254. 

provision  that  default  in  payment  of  instalment  shall  mature  whole 

debt,  instrument  negotiable,  57. 
instruments  issued,  accepted  or  indorsed  when  overdue  are  payable 

on  demand,  66. 
presentment  for  acceptance  necessary  to  fix,  117,  118. 
time  of  presentment  for  acceptance,  120-123. 


INDEX.  451 

References  are  to  Pag^es. 

MATURITY  (continued)— 

presentment  for  acceptance  must  be  made  before,  122. 
acceptance  of  overdue  bill,  146. 

of  bill  payable  after  sight  and  accepted  for  honor,  156. 
holder  in  due  course  must  take  before,  214. 
when  paper  overdue,  214. 

protest  before,  where  acceptor  is  insolvent,  274. 

instruments  not  payable  on  demand  must  be  presented  for  payment 
at,  254. 

MEMORANDA,  made  before  delivery  are  part  of  contract,  112. 

MERCHANDISE,  instruments  payable  in,  not  negotiable,  64. 

option   of  holder  to   require  payment  in   does  not  destroy  negotia- 
bility, 90. 
consideration  for  acceptance,   139. 

MEXICAN   MONEY,  instruments  payable  in  are  negotiable,  63. 

MISTAKE,  in  date,  21,  22. 
burden  of  proof,  21. 
must  be  pleaded,  22. 
in  name  of  payee,  parol  evidence,  83. 
omitted  indorsement,  when  made  relates  back  to  time  of  transfer, 

163. 
not  a  defense  against  bona  fide  holder,  232-235. 
of  postal  clerk,  excuse  for  delay  in  presentment  for  payment,  259. 
in  notice  of  dishonor,  recitals  as  to  time  of  payment  and  amount  pay- 
able, 292,  293. 
cancellation  by,  inoperative,  323. 

MONEY,  negotiable  instrument  must  be  payable  in,  62-64. 

instruments  may  be  payable  in  particular  kind  of  current  money,  63. 

instruments  payable  in  foreign  money,  negotiability,  63. 

promise  in  addition  to  payment  of  money  destroys  negotiability,  91. 

acceptor  agrees  to  pay  in,  131. 

parol  evidence  of  intent  to  pay  in,  63. 

what  constitutes  payment,  326. 

MORTGAGE,  note  conditioned  on  payment  of  mortgage,  not  negotiable, 
48,  49. 
and  note,  ofte  instrument,  113. 
not  attached  to  note  is  not  an  "allonge,"  166. 

MUNICIPAL  BONDS,  how  made  non-negotiable,  53. 
MUNICIPAL  WARRANTS  AND  ORDERS,  not  negotiable,  53. 
MUTUAL  PROMISES,  consideration  for  each  other,  96. 


452  INDEX. 

References  are  to  Pages. 

N. 

NAME,  must  appear  on  instrument  or  no  liability  attaches,  188,  189. 
form  of  signature,  29. 

signature  in  trade  or  assumed  name,  29,  30. 
of  payee  must  be  certain,  81. 

parol  evidence  of  mistake,  83. 
of  drawee,  83. 

sufficient  acceptance,  134. 
of  referee  in  case  of  need  may  be  inserted  in  bill,  128. 
holder  may  insert  his  name  in  blank  for  payee,  25. 
holder  may  sue  in  his  own  name,  160. 

of  maker  or  drawer  must  be  properly  given  in  notice  of  dishonor, 
293. 

NEGLIGENCE,  as  bad  faith  on  part  of  purchaser,  217. 
creating  estoppel  to  deny  forged  signature,  307-310. 
permitting  alteration,  estoppel,  311,  313. 

NEGOTIABILITY,  essentials  of,  39-91. 
substantial  compliance  sufficient,  41. 
assignability  distinguished,  158. 
necessity  of  written  instrument,  40. 
date  not  essential,  41. 
failure  to  specify  value,  44. 
nature  of  consideration  stated,  44. 
the  promise  or  order  to  pay,  45. 
surplusage  does  not  affect,  59-61. 
sealed  instruments  are  negotiable,  42. 

not  affected  by  particular  statement  of  consideration,  44,  51. 
statement  of  transaction,  52. 
signature  essential,  40. 
necessity  of  words  of  negotiation,  71. 

instruments  payable  to  named  payee  "only,"  not  negotiable,  72. 
instruments  payable  to  named  payees  "or  their  collector,"   not  ne- 
gotiable, 72. 
words  of  negotiation  may  be  supplied  by  indorsement,  12. 
what  instruments  payable  to  order,  72-76. 
order  of  payee,  not  maker  or  drawer,  IZ. 
order  of  maker  or  drawer,  Ti. 
order  of  drawee,  74. 
two  or  more  payees,  jointly,  74. 

instrument  payable  to  "steamboat  J  and  owners,"  negotiable,  74. 
instrument  payable  to  named  payee  "et  al.,"  not  negotiable,  74. 


INDEX.  453 

References  are  to   Pages. 

NEGOTIABILITY  (continued)— 

instruments  payable  to  order  of  one  or  some  of  several  payees,  ne- 
gotiable, 75. 
payable  to  holder  of  office,  75. 
what  instruments  payable  to  bearer,  76-83. 

expressly  so  payable,  76. 

fictitious  persons,  77-80. 

payee  not  a  "person,"  80. 

paper  indorsed  in  blank,  81. 
certainty  as  to  parties,  81-84. 
payee  must  be  named  with  certainty,  81. 
payee's  name  blank,  82. 
drawee  must  be  named  with  certainty,  83. 
bill  addressed  to  two  or  more  drawees  in  alternative  or  in  succession 

not  negotiable,  84. 
certainty  as  to  sum  payable,  54-62. 
interest  provision,  55. 
instrument  providing  for  interest  "the   same  as  savings  banks  pay" 

is  not  negotiable,  56. 
instrument  payable  on  or  before  two  years  without  interest  if  paid 

in  one  year,  not  negotiable,  56. 
instruments  payable  in  instalments  are  negotiable,  56. 
instrument  payable  "at  such  times  and  in  such  articles  as  the  payee 

may  need  for  her  support,"  not  negotiable,  56. 
instrument  payable  to  corporation  in  such  instalments  as  directors 

may  requiie,  negotiable,  56. 
instruments    payable    in    instalments   are    negotiable,    provision    that 

default  shall  mature  whole  debt,  57. 
instrument  subject  to  discount,  if  paid  before  maturity,  not  negoti- 
able, 56. 
provision  for  exchange  does  not  destroy,  58. 
instruments  providing  for  payment  of  costs  of  collection,  59. 
instruments  providing  for  payment  of  attorneys'  fees,  negotiable,  59. 
instruments    providing    for    payment    of    taxes    and    charges    render 

amount  payable  uncertain,  62. 
certainty  as  to  time  of  payment,  64-67. 
instruments  not  stating  time  of  payment,  66. 
instruments  payable  at  fixed  time  after  date  or  sight  are  certain  as 

to  time,  67. 
provision  for  extension  of  time,  68. 
instruments  payable  "on  or  before,"  are  negotiable,  69. 
instruments  payable  on  demand,  at  sight  or  on  presentation,  65. 
overdue  paper,  66. 


4:54  INDEX. 

References  are  to  Pages, 

NEGOTIABILITY   (continued)— 

instruments  payable  on  or  at  a  fixed  period  after  event  certain,  69. 

instruments  payable  on  contingency,  70. 

certainty  as  to  time  of  payment,  instrument  payable  at  fixed  time 
"or  when  he  completes"  building,  negotiable,  70,  71. 

certainty  as  to  time  of  payment,  instrument  payable  at  fixed  time 
is  negotiable,  70,  71. 

certainty  as  to  place  of  payment,  84-86. 

rule  place  not  stated,  85. 

promise  or  order  must  be  to  pay  money,  62. 

payable  in  services  or  merchandise,  not  negotiable,  64. 

instruments  promising  to  do  something  in  addition  to  payment  of 
money,  not  negotiable,  91. 

instruments  giving  holder  option  to  require  something  in  lieu  of 
money,  are  negotiable,  90. 

continues  until  restrictive  indorsement  or  discharge,   186. 

absence  of  negotiable  words  does  not  make  indorsement  restrictive, 
173. 

unconditional  nature  of  promise  or  order,  48-54. 

instruments  payable  on  their  return  or  on  return  of  other  instru- 
ments, 49. 

of  note  for  stock  with  provision  for  return  of  stock  on  payment,  49. 

instrument  payable  on  payment  of  certain  mortgage,  49. 

provision  for  sale  of  collateral  does  not  destroy,  86-88 

alternative  contract  for  sale  of  collateral  destroys,  87. 

conditional  sale  notes,  not  negotiable,  88. 

instruments  waiving  statutory  rights,  89. 

judgment  notes,  negotiable,  88-89. 

reference  to  particular  fund  for  reimbursement  does  not  destroy  ne- 
gotiability, 50. 

instruments  payable  out  of  particular  fund,  52. 

instrument  payable  out  of  "the  growing  substance"  of  the  drawer, 
not  negotiable,  53. 

instruments  payable  out  of  "money  in  his  hands,  belonging  to  me," 
not  negotiable,  53. 

instruments  payable  out  of  proceeds  of  sale  of  goods,  not  negotiable, 
53. 

of  order  charging  payment  to  account  under  a  certain  contract,  53. 

of  note  payable  on  a  certain  day  "or  before  if  made  out  of  the  sale" 
of  specified  property,  53. 

of  bank  pass  books,  48. 

of  receivers'  certificates,  47. 

of  bills  of  lading,  46. 


INDEX.  455 

References  are  to  Pages. 

NEGOTIABILITY   (continued)— 
of  certificates  of  deposit,  47. 
of  warehouse  receipts,  46,  64. 
of -instruments  given  as  collateral,  86. 
instruments  waiving  statutory  rights,  89. 
city  warrants  or  orders,  53. 
village  warrants  or  orders,  S3. 
county  warrants  or  orders,  53. 
municipal  warrants  and  orders,  53. 
school  district  orders,  53. 

NEGOTIABLE  INSTRUMENTS,  only  included,  3. 

NEGOTIABLE  INSTRUMENTS  LAWS,  title  of,  3. 
as  codification,  1. 
no  retroactive  eflfect,  4. 
application  to  renewal  notes,  5. 
when  take  effect,  5. 
'  repeal  of  prior  statutes,  8. 
cover  negotiable  instruments  only,  3. 

NEGOTIATION,  158-187. 
what  constitutes,  161. 
of  bills  drawn  in  sets,  184. 
by  prior  party,  186. 
holder  must  negotiate  or  present  for  acceptance  within  reasonable 

time,  120. 
prevented  by  restrictive  indorsement,  186. 

by  delivery  or  qualified  indorsement,  implied  warranties,  201. 
prevented  by  restrictive  indorsement,  186. 
of  demand  paper,  purchase  before  maturity,  215. 
when  title  of  person  negotiating  is  defective,  223. 
presentment   of  bill   for  payment  within   reasonable   time  after  last 

negotiation,  255. 
defenses  available  against  holder  in  due  course,  232. 

NEW    YORK    FUNDS,    instrument    payable    in    such    funds    "or    their 
equivalent,"  not  negotiable,  63. 

NONEXISTENT  PERSONS,  instruments  payable  to  order  of  are  pay- 
able to  bearer,  77. 

NON-NEGOTIABLE  INSTRUMENTS,  not  covered  by  negotiable  in- 
struments laws,  3. 
consideration  must  be  proved,  92-94. 
presentment  for  payment  not  necessary,  245. 

NONRESIDENCE,  excusing  presentment  for  payment,  264. 


456  INDEX. 

References  are  to  Pages. 

NOTARY  PUBLIC,  may  make  presentment  for  acceptance  on  behalf  of 
holder,  124. 
presentment  for  payment  need  not  be  made  by  notary,  246. 
may  give  notice  of  dishonor,  285,  286. 
may  make  protest,  272,  273. 

NOTE,  definition,  16. 

NOTES.     See  Promissory  Notes. 

NOTICE,  efifect  of  statute  after  passage  but  before  it  takes  effect,  6, 

to  debtor,  of  assignment  of  debt,  159. 

of  acceptance,  132. 

of  nonpayment,  inures  to  benefit  of  subsequent  holders  of  dishonored 
paper,  67. 

to  drawee  not  to  pay,  waiver  of  presentment  for  acceptance,  122. 

absence  as  essential  of  holding  in  due  course,  214-217,  222-227. 

to   purchasers,  what  constitutes,  214-217,  222-227. 

irregularities  on  face  of  paper  as  actual  notice  to  purchaser,  212-214. 

holder  in  due  course  must  take  without  notice  of  previous  dishonor, 
214. 

acquired  after  transfer  does  not  afifect  bona  fides,  222. 

of  limited  authority  of  agent  from  signature  by  procuration,  34. 

to  purchaser  from  recital  that  bill  is  "second  of  exchange,  first  un- 
paid," 14. 

purchaser  not  a  holder  in  due  course,  214. 

of  protest,  service  in  New  York  City  in  case  of  epidemic.     See  12;^ 
124. 

NOTICE  OF  DISHONOR,  form  and  requisites,  291,  292. 
may  be  personal  or  by  mail,  293-295, 
by  whom  given,  285-287. 
by  agent,  286. 
to  whom  given,  288-291. 

when  inures  to  benefit  of  subsequent  holders,  304. 
to  bankrupt  or  insolvent,  291. 
parties  dead,  289. 
partners,  290. 

joint  parties  not  partners,  290. 
when  notice  need  not  be  given  to  drawer,  282. 
when  notice  need  not  be  given  to  indorser,  284. 
time  within  which  notice  must  be  given,  296-298i. 
premature  notice,  296. 
excuse  for  delay,  305. 
dispensing  with  notice,  302. 
waiver  of,  303. 


INDEX.  457 


References  are  to  Pages. 


NOTICE  OF  DISHONOR  (continued)— 
effect  of  omission  to  give,  306. 
place  where  notice  must  be  sent,  299. 
what  constitutes  deposit  in  post  office,  295. 
actual  receipt  sufficient,  300. 
suflficienc>   of  terms,  292. 

NOTING,  protest,  273. 

NUMBER,  of  parts  of  bill  draiwn  in  set,  14. 
of  drawees,  12. 


o. 


OFFICER,  instruments  payable  to  order  of,  negotiable,  75. 
OPTION,  to  declare  whole  debt  due  on  failure  to  pay  instalment  does 
not  destroy  negotiability,  57. 
to  declare  instrument  payable  before  stated  time,  effect  on  negotia- 
bility, 70. 
of  payer  to  reimburse  himself  out  of  particular  fund,  effect  on  ne- 
gotiability, 50. 
of  holder  to  require  something  in  lieu  of  money,  90. 
of  maker  to  pay  in  money  or  goods,  destroys  negotiability,  64. 
•  of  holder  to  treat  bill  as  promissory  note,  110. 
to  present  demand  instrument  before  noon  on  Saturday,  252. 
of  holder  to  resort  to  referee  in  case  of  need,  128,  267. 
ON  OR  BEFORE,  instruments  so  payable  are  certain  as  to  time  and 
negotiable,  64. 
instrument  payable  on  or  before  two  years  without  interest  if  paid 
in  one  year,  not  negotiable,  56. 

ORAL  ACCEPTANCE,  insufficient,  132. 
oral  promise  to  accept,  not  binding,  150. 

ORAL  NOTICE,  of  dishonor,  291,  292. 

ORDER,  definition  of  bill  of  exchange,  11. 

instrument  payable  at  bank  is  an  order  on  bank  to  pay  for  account 

of  debtor,  325. 
sufficiency  of  order  in  bill,  45. 
unconditional,  48-54. 

on  savings  bank,  to  be  accompanied  by  pass  book,  not  negotiable,  48. 
instrument  must  be  payable  to  order  or  to  bearer,  71. 
what  instruments  payable  to,  72-76. 
instruments  payable  to  order  of  maker  or  drawer,  73. 


458  INDEX. 

References  are  to  Pages. 

ORDER  (continued)— 

instruments  payable  to  order  of  drawee,  74. 

instruments  payable  to  order  of  two  or  more  payees  jointly  are  pay- 
able to  order,  74. 

instruments  payable  to  one  or  some  of  several  payees,  75. 

instruments  payable  to  order  of  holder  of  office,  negotiable,  75. 

instruments  payable  to  order  of  fictitious  or  nonexistent  persons  are 
payable  to  bearer,  77-80. 

instrument  payable  to  order  of  person  who  should  thereafter  indorse 
it  is  sufficiently  certain  as  to  payee,  82. 

must  be  for  payment  of  money,  62. 

acceptance  necessary  to  charge  drawee,  130,  131. 

instruments  payable  to,  negotiable  by  indorsement,  162. 

third  person  signing  in  blank  before  delivery,  paper  payable  to  order 
of  third  person,  is  liable  to  payee  and  all  subsequent  parties,  198. 

purchaser  of  paper  payable  to,  without  indorsement  of  payee,  is  not 
holder  in  due  course,  213. 

changing  word  "order"  to  "bearer"  is  material  alteration,  314-316. 

municipal  orders  not  negotiable,  53. 

school  district  orders  not  negotiable,  S3. 

certificates  of  deposit,  47. 

P. 

PAROL,  evidence.     See  Evidence. 

to  show  accommodation  character,  102. 
waiver  of  presentment  for  payment,  264,  265. 
waiver  of  notice  of  dishonor,  303. 

PARTIAL  FAILURE,  of  consideration,  100. 

PARTICULAR  FUND,  reference  to,  for  reimbursement,  does  not  des- 
troy negotiability,  50. 

instrument  payable  out  of,  not  negotiable,  52. 

municipal  warrants  and  orders  payable  out  of,  not  negotiable,  53. 

bill  or  order  on,  operates  as  assignment,  123. 

PARTIES,   certainty,  81-83. 
designation  of  payee,  81. 
designation  of  draw^ee,  83. 
joint  and  several  liability,  111. 
joint  payees  or  indorsees  who  indorse  deemed  to  indorse  jointly  and 

severally  209. 
to  action  against  savings  bank  on  draft,  substitution  of  claimant  of 
fund  as  defendant,  115. 


INDEX.  450 

References  are  to  Pages. 

PARTIES— Cont'd. 

change  in  number  or  relation,  material  alteration,  314-316. 

PARTNERSHIP,  presentment  to  one  partner  for  acceptance,  sufficient, 
125. 
one  partner  may  indorse  for  firm,  179. 
presentment  to  partner  for  payment,  248. 
notice  to  one  partner  is  notice  to  firm,  227. 
notice  of  dishonor,  290. 
,     partner  may  waive  protest,  276. 

PASSAGE,   negotiable  instruments   laws  not  applicable  to   instruments 
made  before  their  passage,  4. 
"prior  to  its  passage"  in  a  statute  construed  to  mean  "prior  to  its 
taking  eflfect,"  4,  5. 

PATENTS,  patent  right  note  must  state  consideration,  44. 

PAYEE,  instrument  in  possession  of,  before  passage  of  negotiable  in- 
struments law,  presumed  to  have  been  delivered  before  that  time,  5. 

must  be  named  or  indicated  with  reasonable  certainty,  81. 

instrument  payable  to  named  payers  "et  al,"  is  not  sufficiently  cer- 
tain as  to  payees,  82. 

place  for  payee's  name  blank,  certainty  in  designation,  82. 

instruments  payable  to  "one  or  some"  of  several  payees  negotiable, 
12,  75. 

instruments  payable  to  two  or  more  payees  jointly,  negotiable,  74. 

instruments  payable  to  "one  or  same"  of  several  payees  negotiable, 
12,  75. 

instruments  payable  to  order  of  negotiable,  72). 

filling  in  name,  25. 

instrument  payable  to  order  of  person  who  shall  thereafter  indorse  it 
is  sufficiently  certain  as  to  the  payee,  82. 

fictitious,  instruments  payable  to  order  of  are  payable  to  bearer, 
77-80. 

existence  admitted  by  acceptance,  192. 

of  check,  existence  admitted  by  certification,  194. 

existence  admitted  by  maker  or  drawer,  189,  190. 

joint  payees  must  all  indorse,  189,  190. 

joint  payees  deemed  to  indorse  jointly  and  severally,  209. 

of  paper  payable  to  order,  indorsement  necessary  to  holding  in  due 
course,  213. 

failure  to  present  check,  liability  for  loss,  256,  257. 

illness  excusing  delay  in  presentment  for  acceptance,  121, 

cannot  recover  against  accommodation  maker,  103,  104. 

may  recover  of  third  person  signing  in  blank  before  delivery,  198-201. 


460  INDEX. 

References  are  to  Pages. 

PAYEE  (continued)— 

repurchasing  paper  is  not  bona  fide  holder,  241. 
substitution  of  another  as  payee,  material  alteration,  314-316. 
payment  to,  after  transfer,  does  not  discharge  instrument,  323. 

PAYMENT,  319-340. 

what  constitutes,  326. 
purchase  or,  323. 

time  of,  certainty  in  instrument,  64-71. 
time  not  stated,  instruments  payable  on  demand,  66. 
overdue  paper,  66. 

bill  payable  five  days  after  sight  is  payable  five  days  after  accept- 
ance, 67. 
provision  for  extension  of  time  of  payment,  68. 
instruments  payable  "on  or  before"  are  certain  as  to  time,  68. 
instruments   payable   on   or  at    fixed   period   after  event   certain   are 

negotiable,  69,  70. 
paper  payable  "on  or  by"  certain  date  is  payable  on  that  date,  69. 
instruments  payable  on  a  contingency,  70. 
holder  may  fill  blank,  25. 
certainty,  64-71. 
place  of,  holder  may  fill  blank,  25. 

is  place  for  presentment  for  acceptance,  123. 
to  indorsee  under  restrictive  indorsement,  174. 
to  indorsee  under  conditional  indorsement,  177. 
implied  warranty  of  nonpayment  on  sale  of  instrument,  163. 
acceptor  agrees  to  pay  at  maturity  in  money,  191. 
agreement  of  acceptor  for  honor,  153-156. 
agreement  of  general  indorser,  203. 

taking  in  payment  of  antecedent  debt  is  a  taking  for  value,  218,  219. 
unindorsed  payments  no  defense  against  bona  fide  holder,  233. 
presentment  for,  242-267. 

change  in  medium  of,  is  material  alteration,  314-316. 
alteration  of  time  or  place  of,  is  material,  314-316. 
for  honor,  329-332. 
stopped  by  drawer,  presentment  for  payment  excused,  264i. 

notice  of  dishonor  excused,  283. 

excuse  for  failure  to  protest,  261,  277,  278. 
dishonor  for  nonpayment,  266. 
protest  for  nonpayment,  268-279. 
of  bill  drawn  in  a  set,  328. 

by  or  to  bank  when  instrument  payable  there,  325. 
of  draft  by  referee  in  case  of  need,  267. 
by  principal  debtor  or  party  accommodated,  321. 


INDEX.  461 

References  are  to  Pa^es. 

PAYMENT  (continued)— 

by  person  secondarily  liable  does  not  discharge  instrument,  338. 
prior  party  to  whom  instrument  is  negotiated  back  cannot  enforce 

payment  against  persons  to  whom  he  was  liable,  186,  187. 
striking  out  indorsements  and  reissuing  paper,   185-186. 
part  payment  not  a  consideration  for  an  extension  of  time,  334,  335. 
indorsement  as  to  residue,  167. 

PENALTY,  provision  for  additional  interest  after  maturity,  56. 

void  provisions  for  attorneys'  fees  do  not  destroy  negotiability,  6U, 
61. 

PEXCIL,  instrument  written  in,  valid  and  negotiable,  18. 
indorsement  in,  168. 
alteration  of  instrument  in,  314. 

PERSON,  definition,  16. 

fictitious  or  nonexistent  payee,  paper  is  payable  to  bearer,  77-80. 
instruments  where  payee  is  not  a  person,  payable  to  bearer,  80. 

PERSONAL  LIABILITY,   of  acceptor  in  representative   capacity,   193, 
194. 
under  indorsement  in  representative  capacity,  180,  181. 

PERSONAL   REPRESENTATIVE,   of   deceased   drawee,   may   recerve 
presentment  for  acceptance,  126. 
of  person  primarily  liable,  presentment  for  payment  to,  247. 
service  of  notice  of  dishonor  on,  289. 

PERSON  PRIMARILY  LIABLE.     See  Primary  Liability. 

PERSON   SECONDARILY  LIABLE.     See   Secondary  Liability. 

PLACE,  where  drawn  need  not  be  stated,  19. 
of  presentment  for  acceptance,  123. 

of  presentment  in  case  of  epidemic  in  New  York  City,  123,  124. 
acceptance  to  pay  at  particular  place  is  general,  145. 
of  indorsement,    184. 
of  presentment  for  payment,  261-263. 

branch  office,  262. 

place  of  business,  262. 
of  payment,  holder  may  fill  blank,  25. 

certainty,  64. 

not  specified,  place  of  presentment,  262. 

alteration  is  material,  314-316. 
where  notice  of  dishonor  must  be  sent,  299. 
of  making  protest,  275. 

PLEADING,  mistake  in  date  must  be  pleaded,  22. 


462  INDEX. 

References  are  to  Pagea 

PLEDGE,  provision  for  sale  of  collateral  does  not  destroy  negotiability, 
86. 
alternative  provision  for  sale  of  collateral  destroys  negotiability,  87. 

POSITION,  of  signature  of  maker  or  drawer,  28,  29. 

POSSESSION,  by  payee  prima  facie  evidence  of  delivery,  5,  37,  38. 
confers  prima  facie  authority  to  fill  blanks,  24. 
to  indorse,  180. 

to  present  for  payment,  246,  247. 
to  receive  payment,  321-323. 

POSTDATING,  23. 

POST  OFFICE,  delay  in  mails  excusing  w^ant  of  timely  presentment  for 

acceptance,   121. 
service  of  notice  of  protest  in  New  York  City,  in  case  of  epidemic, 

123,   124. 
deposit  of  notice  of  dishonor  in,  what  constitutes,  294,  295. 

POUNDS  STERLING,  instrument  payable  in,  is  payable  in  money,  63. 
POWER  OF  ATTORNEY,  to  confess  judgment  does  not  destroy  nego- 
tiability, 88. 
PRE-EXISTING  DEBT,  sufficient  consideration  for  negotiable  instru- 
ment, 96. 
consideration  for  acceptance,  139. 
consideration  for  indorsement  or  transfer,  161. 

PREFERENCE,  of  parties  offering  to  pay  for  honor,  331. 
PREMATURE  ACTION,  begun  on  last  day  of  grace,  253. 
PREMIUM  NOTES,  negotiability,  44. 
PRESENTATION,  instruments  payable  on,  are  payable  on  demand,  65. 

PRESENTMENT,  for  acceptance,  117-129. 

necessary  in  case  of  bills  drawn  "after  sight"  or  "at  sight,"  117. 
not  necessary  in  case  of  demand  paper,  117. 
bills  in  sets,  126. 

holder  must  present  or  negotiate  within  reasonable  time,  120. 
by  whom  made,  124. 
to  whom  made,  125. 

bill  addressed  to  two  or  more  drawees  not  partners,  125. 
time  of,  120-123. 

rule  where  time  is  insufficient,  123. 
place  of,  123. 

dishonor  by  nonacceptance,  127. 
gives  date  to  subsequent  acceptance,  141. 
necessary  recital  in  notice  of  dishonor,  293. 


INDEX.  463 

References  are  to  Pagea. 

PRESENTMENT  (continued)— 

or  payment,  construction,  122. 
when  excused,  119. 
waiver,  122. 
for  payment,  243-267. 

when  necessary,  243. 

by  whom  made,  246. 

to  whom  made,  247. 

to  acceptor  for  honor,  260. 

instruments  not  payable  on  demand,  254-256. 

at  office  of  trust  company  not  a  presentment  at  a  bank,  262. 

branch  office,  262. 

at  bank  after  business  hours,  251. 

instrument  must  be  exhibited,  263. 

when  dispensed  with,  264,  265. 

waiver,  265,  266. 

or  for  acceptance,  construction,  122. 

necessary  recital  in  notice  of  dishonor,  292. 

necessary  showing  in  formal  protest,  270-272. 

PRESUMPTIONS.    See  Evidence. 

PRIMARY  LIABILITY,  of  acceptor,  191-195. 

presentment  for  payment  to  person  primarily  liable,  247. 

presentment  for  payment  not  necessary  to  charge  person  primarily 
liable,  243. 

discharge  of  instrument  where  principal  debtor  becomes  holder,  324. 

payment  to  acceptor  as  person  primarily  liable  discharges  instru- 
ment, 321. 

PRINCIPAL  AND  AGENCY.     See  Agency. 

PRINCIPAL    AND    SURETY,    relation    of    drawer    and    accommoda- 
tion acceptor,  192. 

PRINT,  included  in  "written,"  16,  18. 

PRINTING,  printed  forms  of  negotiable  instruments  sufficient,   18. 
written  words  control,  109. 
signature  in,  to  notice  of  dishonor,  is  good,  292. 

PROCURATION,  signature  by,  notice  of  limited  authority  of  agent,  34. 

PROMISE,  contained  in  negotiable  instrument,  45. 
the  promise  of  the  drawer  or  maker,   189,  190. 
implied  promise  to  pay,  46. 
"good  to  R.  C,  or  order,  for  thirty  dollars,"  is  a  sufficient  promise, 

46. 
"due  A  on  corn,  $525"  is  a  sufficient  promise  to  pay,  46. 


464  INDEX. 

References  are  to  Pages. 

PROMISE  (continued)— 

to  be  "accountable,"  equivalent  to  promise  to  pay,  46. 
"I  owe  the  estate  of  W"  is  not  a  sufficient  promise  to  pay,  46. 
in  certificate  of  deposit  makes  it  negotiable,  47. 
must  be  unconditional  and  unrestricted,  48-54. 
must  be  to  pay  money,  62. 
to  accept,  equivalent  to  acceptance,  150-152. 

to  accept,  made  before  bill  w^as  drawn  excuses  presentment  for  ac- 
ceptance,  120. 

PROMISSORY  NOTES,  definition  of,  10. 

brought  within  law  merchant  by  statute  of  3  and  4  Anne,  7. 

corporate  notes  negotiable,  42. 

certificate  of  deposit  construed  as  note,  47. 

promise   to   pay   provided   a   railroad   be   built   by   certain   time,    not 

negotiable,  49. 
provision  for  surrender  of  note  on  payment,  negotiability,  49. 
given  as  collateral,  negotiability,  86-88. 
instrument   with   conditional   provision   for  payment   in   instalments, 

not  negotiable,  86-88. 
judgment  notes,  negotiable,  88. 
one  note  consideration  for  another,  96. 
when  bill  may  be  treated  as,  110. 
three  days  of  grace  on,  in  North  Carolina,  253. 
as  payment,  327. 

PROOF.     See  Evidence. 

PROPERTY,  instruments   payable   in  property   other  than   money,  not 
negotiable,  64. 

PROTEST,  form  and  contents,  270-272. 
time  of  making,  273. 
place  of  making,  275. 
after  dishonor  for  nonacceptance,  128. 
for  nonacceptance  and  for  nonpayment,  268-269. 
waiver  in  instrument  does  not  destroy  negotiability,  90. 
service  of  notice  in  New  York  City  in  case  of  epidemic,  123,  124. 
acceptance  supra  protest,   153-156. 
of  bill  accepted  for  honor,  274. 
of  bill  dishonored  by  acceptor  for  honor,  270. 
damages,  278,  279. 
of  lost  or  detained  bill,  275. 
waiver  of,  276,  277. 
payment  supra  protest  for  honor,  329-332. 

PUBLIC  OFFICER,  instruments  payable  to  order  of,  negotiable,  75,  1^. 


INDEX.  465 

Beferences  are  to  Pagea. 

Q. 

QUALIFIED  ACCEPTANCE,  143. 

QUALIFIED  INDORSEMENT,  175. 
warranties  by,  201. 

R. 

RAILROAD  RECEIPTS,  not  negotiable,  47. 

RATIFICATION,  of  unauthorized  signature  of  agent,  30. 
of  forged  or  unauthorized  signature,  307-310. 
of  unauthorized  indorsement,  180. 
of  alterations,  burden  of  proof,  318. 

REAL  PARTY  IN  INTEREST,  indorsee  for  collection  is,  175. 

REASONABLE  DILIGENCE,  in  giving  notice  of  dishonor,  302. 

REASONABLE  TIME,  for  presentment  for  acceptance,  120. 

for  acceptance  after  presentment,  140. 

for  negotiation  of  demand  paper,  215. 

presentment  for  payment,  249. 
REBUTTAL,  of  presumptions  as  to  date,  21,  22. 

Qif  presumption  of  consideration,  92-94. 

of  presumption  of  consideration  for  acceptance,  139. 

of  presumption  of  delivery  from  possession  by  payee,  37,  38. 

RECEIPT,  certificate  of  deposit  not  containing  a  promise  to  pay  is  a 
receipt,  not  negotiable,  47. 
negotiable  though  providing  for  payment  on  their  return,  49. 
negotiability  of  railroad  receipts,  46. 
of  warehouse  receipts,  46. 
RECEIVERS'  CERTIFICATES,  not  negotiable,  47. 
REFEREE  IN  CASE  OF  NEED,  insertion  of  name  in  bill,  128. 

on  payment  of  bill  has  special  property  in  goods  for  which  it  was 
drawn,  128,  129. 
REGISTRATION,   how   unregistered   municipal   bond   made   non-nego- 
tiable, 42,  43. 
REIMBURSEMENT,  reference  to  particular  fund  for,  does  not  destroy 
negotiability,  50. 
of  payer  for  honor,  332. 

REISSUANCE,  by  prior  party,  186. 

after  payment  by  person  secondarily  liable,  339. 

Opp. — Sel. — 30 


i66  INDEX. 

References  are  to  Pages. 

RELEASE,  of  principal  debtor,  releases  person  secondarily  liable,  334. 

REMEDY  AT  LAW,  precluding  relief  in  equity  for  want  of  considera- 
tion, lOL 

RENEWAL  NOTES,  application  of  law  to,  5. 

RENT,  note  showing  consideration,  negotiable,  52. 

RENUNCIATION,  discharge  by,  336. 

REPEAL,  of  statute  of  3  and  4  Anne,  c.  9,  §  1,  by  Bills  of  Exchange  Act 
1882,  7,  8. 
of  prior  statutes  by  negotiable  instruments  laws,  8. 
statutes  requiring  consideration  to  be  stated,  not  repealed  by  nego- 
tiable instruments  laws,  44. 
of  Virginia  statute  requiring  instrument  to  be  payable  at  bank,  85. 

REPRESENTATIVE  CAPACITY,  indorsement  in,  180. 

signature  in,  31-34. 
RESCISSION,  by  accommodation  party  before  paper  is  discounted,  104. 
RESIDENCE,  instrument  not  stating  place  of  payment,  payable  at  resi- 
dence of  person  to  make  payment,  85,  86. 
time  for  sending  notice  of  dishonor  when  parties  reside  in  same  city, 

296,  297. 
time  of  giving  notice  of  dishonor  where  parties  live  in  different  cities, 

297,  298. 
place  to  send  notice  of  dishonor,  299. 
resident  of  place  of  dishonor  may  make  protest,  272,  273. 

RESTRICTIVE  INDORSEMENT,  172. 

unqualified  indorsement  by  indorsee  under,  is  general  indorsement, 
204. 
RETROACTIVE   EFFECT,  negatived  in   negotiable  instruments   laws, 
4. 
renewal  notes,  5. 
RETURN,  instruments  payable  on  their  return  or  return  of  other  instru- 
ments, negotiability,  49. 
REVOCATION,   of  negotiable  instrument   before   delivery,  35. 
by  accommodation  party  before  paper  is  discounted,  104. 
of  acceptance  before   delivery,   131. 
promise  to  accept  order  if  it  is  not  revoked  is  conditional,  152. 

s. 

SALE,  ngeotiability  of  notes  for  price  at  judicial  sale,  75,  76. 

of  goods,  instruments  payable  out  of  proceeds  not  negotiable,  53. 


INDEX.  467 

References  are  to  Pages. 

SALE  (continued) — 

of  collateral,  provision  for  does  not  destroy  negotiability,  86. 
conditional  sale  notes,  not  negotiable,  88. 

SATURDAY,  presentment  for  acceptance  on,  122. 
day  of  maturity,  presentment  for  payment,  252. 

SAVINGS  BANKS,  pass  books  not  negotiable,  48. 

sued  on  draft  claimed  by  third  person  cannot  deposit  funds  in  court 
pending  suit,  115. 

SCHOOL  DISTRICT,  orders  not  negotiable,  53. 

SCOPE  OF  ACT,  negotiable  instruments  only,  3. 

SCRIP,  county,  not  negotiable,  53. 

SEAL,  does  not  destroy  negotiability,  42. 

SECOND  OF  EXCHANGE,  bill  drawn  in  a  set,  14. 

SECONDARY  LIABILITY,  liability  after  dishonor  of  persons  sec- 
ondarily liable,  267. 

payment  by  person  secondarily  liable  does  not  discharge  instrument 
338. 

discharge  of  persons  secondarily  liable,  332. 

SECURITIES,  provision  for  sale  of  collateral  does  not  destroy  nego- 
tiability, 86. 
release  of,  releases  person  secondarily  liable,  335. 

SERVICES,  instruments  payable  in,  not  negotiable,  64. 
consideration  for  negotiable  instrument,  94. 
for  acceptance,   139. 

SET-OFF,  holder  of  negotiable  instrument  may  interpose,  160. 
no  defense  against  bona  fide  holder,  233. 

SETS,  bills  of  exchange  drawn  in  sets,  14. 

presentment  for  acceptance,  of  bill  drawn  in  a  set,  126. 
acceptance  of  bill  drawn  in,  147. 
payment  of  bill  drawn  in,  328. 

SEVERAL  INSTRUMENTS,  construed  together,  112. 

SEVERAL  LIABILITY,  of  joint  payees  or  indorsees  who  indorse,  207, 

SHERIFF,  instruments  payable  to,  negotiability,  75,  76. 

SHORT  TITLE,  of  negotiable  instruments  laws,  3. 

SIGHT,  instruments  payable  at  sight  are  payable  on  demand,  65,  67. 
instruments   payable   at   fixed   period   after   sight   are   certain   as   to 
time,  67. 

SIGHT  DRAFTS,  three  days  of  grace  allowed  in  Massachusetts,  North 


468  INDEX. 

References  are  to  Pages. 

SIGHT  DRAFTS   (continued)— 

Carolina  and  Rhode  Island,  253. 

SIGNATURE,  of  maker  or  drawer  is  necessary,  28. 
position  of,  28. 
form  of,  29. 

to  instrument  in  blank,  25. 
by  agent,  30,  31. 
liability  of  agent,  31. 
admitted  by  acceptance,  192. 

cannot  be  questioned  by  bank  certifying  check,  194. 
of  drawee  to  acceptance,  132. 
of  acceptor  for  honor,  154. 
of  indorser  sufficient  indorsement,   168. 
ratification  of  unauthorized  signature,  30. 
of  maker,  general  indorser  warrants  genuineness,  205. 
to  notice  of  dishonor  not  necessary,  292. 
forged  or  unauthorized,  307-310. 
by  "procuration,"  34. 

SILENCE,  not  a  ratification  of  forged  signature,  309. 

SILVER,  instruments  payable  in  are  negotiable,  63. 

SPECIAL  INDORSEMENT,  indorsee  must  indorse,  169,  170. 

SPECIALTY,  sealed  instrument  is  negotiable,  42,  43. 

SPECIE,  note  payable  in,  negotiable,  64. 

SPECULATION,  notes  for  speculative  consideration  must  so  state,  45. 

SPELLING,  of  name  of  payee,  parol  evidence  of  mistake,  83. 

STATEMENT,  of  consideration  in  instrument,  44. 
of  transaction,  51. 

STATES,    are    foreign    to    each    other    in    construing    bill    as    inland    or 

foreign,  13. 
STATUTE  OF  FRAUDS.     See  Frauds,  Statute  of. 

STATUTES,  when  take  effect,  5,  6. 

3  and  4  Anne,  extending  law  merchant  to  notes,  7,  8. 
English,  affecting  law  merchant  are  part  of  common  law,  8. 
repealed  by  negotiable   instruments   laws   are   not   part   of  the   law 
merchant,  8,  9. 
STAY   LAWS,  negotiability  not  destroyed  by   provision   for   waiver   of 

benefits,  89. 
STIPULATION,  negativing  liability  of  drawer,  191. 


INDEX.  469 

i.eferences  are  to  Pages. 

STOCK,  instruments  payable  in,  not  negotiable,  63. 

instruments  payable  in  money  or  stock,  not  negotiable,  64. 
option  of  holder  to  require  payment  in,  does  not  destroy  negotia- 
bility, 90. 
note  for,  effect  on  negotiability,  of  provision  for  surrender  of  stock 
on  payment,  49. 

STOLEN  PAPER,  35. 

bona  fide  purchasers,  222. 

STRIKING,  indorsements,  185. 

SUBSTANTIAL  COMPLIANCE,  with  provisions  of  negotiable  instru- 
ments laws,  4L 

SUCCESSION,   bill   cannot   be   addressed   to   two   or   more    drawees    in 
succession,  12. 

SUCCESSIVE  INDORSERS,  207. 

SUCCESSORS,  instrument  payable  to  trustees  "or  their  successors,  or 
order"  is  negotiable,  75. 

SUM  PAYABLE.     See  Amount  Payable. 

SUNDAY,  day  of  maturity,  presentment  for  payment  on  next  business 
day,  252. 

SUPRA   PROTEST,  acceptance,   153-156. 

SURETIES,   status    of   consecutive    indorsers   under   mutual   agreement, 
207. 

SURRENDER,  of  instrument,  on  payment,  329. 

SURVIVING  PARTNER,  notice  to,  sufficient,  290. 


T. 


TAXES,  provision  for  payment  of,  renders  amount  payable  uncertain,  62. 

TELEGRAPH,  acceptance  by,  135. 
certification  of  check  by,  149. 

TEMPORARY  RESIDENCE,  notice  of  dishonor  may  be  sent  to,  30L 

TENDER,  willingness  and  ability  to  pay,  when  equivalent  to,  244. 
by  prior-party  discharges  person  secondarily  liable,  333,  334. 

THEFT,  bona  fide  purchasers  of  stolen  paper,  222. 

THIRD  OF  EXCHANGE,  bill  drawn  in  a  set,  14. 

TIME,  when  negotiable  instrument  laws  take  effect,  5,  6. 
uncertainty  in  judgment  note  destroys  negotiability,  88. 


-170  INDEX. 

References  are  to  Pages. 

TIME  (continued) — 

what  instruments  payable  at  fixed  or  determinable  future  time,  67. 

check  payable  at  future  time  is  bill  of  exchange,  14,  IS. 

of  maturity,  252-254. 

maturity  fixed  by  presentment  for  acceptance,  117,  118. 

for  giving  notice  of  dishonor,  296-299. 

from  which  interest  runs,  108. 

reasonable,  for  negotiation  of  demand  paper,  215. 

computation  of,  254. 

for  presentment  for  acceptance,  120,  123. 

reasonable  time  for  acceptance  after  presentment,  98. 

of  acceptance,  qualified,  143. 

of  presentment  for  payment,  249-254. 

to  accept  for  honor,  260. 
of  indorsement,  183. 
of  protest,  273. 
of  payment,  certainty,  64. 

uncertainty  created  by  alternative  provision  for  sale  of  collat- 
erals, 85-88. 

instruments  payable  on  contigency,  not  negotiable,  70. 

instruments  payable  on  and  at  fixed  period  after  event  certain, 
69,  70. 

paper  payable  "on  or  before"   or  "on  or  by,"  a  certain  date  is 
payable  on  that  date,  69. 

bill  payable  five  days  after  sight  is  payable  five  days  after  ac- 
ceptance, 68. 

holder  may  fill  blank  for  time  of  payment,  25. 

parol  evidence,  66. 

not  stated,  instruments  payable  on   demand,  66. 

what  instruments  payable  on  demand,  65-67. 

recital  in  notice  of  dishonor,  291-292. 

alteration  is  material,  315. 

TITLE,  of  negotiable  instrument  laws,  3. 

to  antedated  or  postdated  instrument  dates  from  delivery,  23. 

reservation  in  note  for  price  of  goods  destroys  negotiability,  88. 

by  delivery,  163. 

passes  by  delivery  under  indorsement  in  blank,  162. 

under  transfer  of  negotiable  instrument,  158-161. 

does  not  pass  under  indorsement  of  part  of  sum  payable,  167. 

under  restrictive  indorsement,  174. 

under  indorsement  from  one  joint  indorsee  to  another,   179. 

to  bill  in  a  set,  as  between  holders  of  separate  parts,  184. 


INDEX.  471 

References  are  to  Pages. 
TITLE  (continued) — 

under  transfer  without  indorsement,  of  instrument  payable  to  order, 

162. 
warranty  of,  by  general  indorsement,  203. 

under  transfer  by  delivery  or  qualified  indorsement,  201. 
passes  by  indorsement  or  assignment  of  corporation  or  infant,  178. 
t)ona  fide  holder  must  take  without  notice  of  defects,  222. 
of  person  negotiating,  when  defective,  223. 
under  assignment  of  non-negotiable  instrument,  159,  160. 

TOWN  ORDERS,  not  negotiable,  53. 

TRADE  NAME,  as  signature,  29. 

TRANSACTION,  statement  of  in  note,  51. 

TRANSFER,  158-187. 

to  two  or  more  indorsers  severally,  not  a  negotiation,  167. 
of  warehouse  receipts  without  indorsement,  47. 

TRANSFEREE,  may  sue  in  his  own  name,  160. 

TRUST,  indorsement  creating  is  restrictive,  172-174. 

TRUSTEES,  personal  liability  on  note,  32-34. 

instrument  payable  to  order  of,  negotiability,  75. 
for  insolvent  of  bankrupt  drawee  may  receive  presentment  for  ac- 
ceptance, 126. 

u. 

UNCONDITIONAL  PROMISE,  in  negotiable  instrument,  48. 

UNDISCLOSED  AGENCY,  to  fill  blanks  in  instrument  signed  and  de- 
livered in  blank,  rights  of  bona  fide  holders,  235-238. 
liability  of  agent  negotiating  without  indorsement,  209. 

UNIFORMITY,  purpose  of  negotiable  instrument  laws,  1,  2. 

USAGE,  affecting  time  of  presentment  for  acceptance,  121. 

USE,  construed  to  mean  interest,  109. 

USURY,  purchaser  of  paper  disclosing,  not  holder  in  due  course,  213. 
rule  that  bona  fide  holder  may  recover  full  amount  does  not  cure 

void  usurious  transactions,  239. 
provision  for,  does  not  destroy  negotiability,  55. 


V. 


VALUE.     See  Consideration, 
definition,  16. 


472  INDEX. 

References  are  to  Pages. 

VALUE  RECEIVED,  consideration  presumed,  92. 
not  necessary  to  negotiability,  44. 

VARIANCE,  between  pleading  and  proof  as  to  time  of  indorsement,  183. 

VILLAGE  ORDERS,  not  negotiable,  53. 

VOUCHERS,  municipal,  not  negotiable,  S3. 

w. 

WAIVER,  of  benefits  of  law  for  protection  of  obligor  does  not  destroy 
negotiability,  89. 
of  notice,  provision  for  does  not  destroy  negotiability,  89. 
of  legal  rights,  consideration  for  negotiable  instruments,  95. 
of  right  to  set  up  want  or  failure  of  consideration,  lOL 
of  condition  in  acceptance,  144. 
of  demand  and  notice,  holder  cannot  insert,  171. 
of  presentment  for  payment,  264-266. 
of  right  to   exhibition   of  instrument   on   presentment   for  payment, 

264. 
of  presentment,  waiver  of  protest  deemed  to  be,  266. 
of  notice  of  dishonor,  303,  304. 
of  protest,  276,  277. 
by  drawer  of  right  to  discharge,  191. 

WANT  OF  CONSIDERATION,  99. 

may  be  shown  in  action  on  non-negotiable  instrument,  99. 
evidence  rebutting  presumption  of  consideration,  92-94. 
acceptor  cannot  set  up,  as  against  payee,  140. 
accommodation  paper,  101. 

WAR,  excuse  for  delay  in  presentment  for  payment,  259. 
excusing  notice  of  dishonor,  302. 
excusing  failure  to  protest,  277,  278. 

WAREHOUSE  RECEIPTS,  negotiability,  46,  64. 

WARRANT,  to  confess  judgment  does  not  destroy  negotiability,  88. 
municipal  warrants  not  negotiable,  53. 

WARRANTIES,  by  general  indorsement,  203. 

implied,  under  indorsement  without  recourse,  177. 

under  negotiation  by  delivery  or  qualified  indorsement,  201. 

WITHDRAWAL,  of  funds  by  drawer,   excuse  for  nonpresentment  for 
payment,  264. 
excuse  for  failure  to  protest,  278. 


INDEX.  473 

RefeKDces  are  to  Pages. 

WITHOUT  RECOURSE,  stipulation  negativing  drawer's  liability,  191. 
indorsement,  175-177. 
holder  may  fill  blank  indorsement  with  his  own  name,  171. 

WITNESS,  to  protest  not  made  by  notary,  273. 

WORDS  OF  NEGOTIATION,  necessity  of  words  "order"  or  "bearer,' 
71. 

WRITING,  negotiable  instrument  must  be  in,  18. 
includes  print,  16,  18. 

controls  print  in  case  of  discrepancy,  109. 
acceptance  must  be  in,  132. 
certification  of  check  must  be  in,  149. 
acceptance  for  honor  must  be  in,  154. 
indorsement  must  be  in,  165. 

authority  to  indorse  may  be  in  writing  or  by  parol,  180. 
notice  of  dishonor  may  be  oral,  292 
waiver  of  protest  should  be  in,  277. 
renunciation  must  be  in,  323. 

WRITTEN,  includes  print,  16,  18. 


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